Are Online Savings Account Rates as Good As Advertised

If you have ever spent any time searching the internet for the best interest on savings account, you probably found one financial institution after another advertising great rates.  On the surface, these rates look incredible but are they really as good as what the banks and credit unions advertise.  Obviously, when choosing an online savings, the primary goal would be to find one that offers the most competitive interest so ultimately, you make money on the money deposited.

If you have ever spent any time searching the internet for the best interest on savings account, you probably found one financial institution after another advertising great rates.  On the surface, these rates look incredible but are they really as good as what the banks and credit unions advertise.  Obviously, when choosing an online savings, the primary goal would be to find one that offers the most competitive interest so ultimately, you make money on the money deposited.

Good news – it is possible to find high yield savings accounts being advertised as excellent choices but it requires dedication of time to conduct research.  Now, if you want to get your money into a savings account that has competitive interest and simply have no time to scour through hundreds of financial institutions online, you could begin by looking at the most reputable banks.  Although this may not ultimately lead to the highest interest, it would provide you with peace of mind that you would be making high interested on the money being saved.

In addition to looking at the better known banks and comparing deals if you can, consider the following tips for finding the best rates online.

•    Local Banks – Keep in mind that local banks nowadays have websites where sometimes, interest is higher when opening and managing an account via the internet.  Therefore, if you already have a bank or prefer to keep your money in a financial institution that offers both in-person and online banking products and services, you might begin your search locally.
 
•    Fixed Rates – No matter how good the rate being advertised, make sure it is fixed.  The reason is that if the market were to fluctuate, causing interest to rise and fall, you want to know you locked into a high rate that would never change, which is what the fixed rate offers.  If the rate on the savings account was adjustable and the market was to decline, the amount you would earn on your money would also decline.

•    Introductory Offers – You will find that many online banks have an introductory offer, which is designed to attract new customers.  Often, this type of savings is a good deal but only if the introductory period is a minimum of six months and the high interest charged during that time remains competitive after the introductory period ends.

•    Protection – The last thing you would want happen is to put your hard-earned money into an online bank only to discover you had no protection and lost everything.  Sadly, this scenario plays out all too often.  Therefore, make sure any savings account being considered has FDIC protection.

•    Penalties – Sometimes, hidden clauses are included with online banks, which means once your money has been put into an account you would be required by law to follow all the terms, regardless if they benefited you or not.  Because of this, you should always read all the terms and conditions before turning your money over to any bank, online or not.  For instance, after putting your money into a high yield savings account online, you may find you cannot move your money to another bank of your choosing for a set amount of time.