Online Savings Account

An online savings account is a savings account that is primarily managed through the internet. This process isknown as e-banking. Online savings accounts have become very popular as they can be maintained with minimal fees and earn higherinterest rates. This has led to competition among financial institutions that are now offering new features in online savings accounts. Such accounts can be set up very easily with an online interface, since there are no physical branches.

An online savings account is a savings account that is primarily managed through the internet. This process isknown as e-banking. Online savings accounts have become very popular as they can be maintained with minimal fees and earn higherinterest rates. This has led to competition among financial institutions that are now offering new features in online savings accounts. Such accounts can be set up very easily with an online interface, since there are no physical branches.

 

Benefits of an Online Savings Account

Here are some of the advantages of an online savings account:

• Online banks are able to offer higher interest rates, since there are no major expenses on rent, cashiers and paperwork.

 

• Transferring funds from and to your online savings account is quite convenient. The process becomes easier with the help of the Automatic Clearing House (ACH) debit facility. Funds can also be transferred between an online savings account and a checking account.

 

• One can manage his or her account at anytime and from anywhere in the world. In case of doubt, one can chat live with a bankrepresentative through the IM facility.

 

• Some banks also have the facility to pay bills, send money orders and make free demand drafts. Moreover, there is no chargefor transferring funds electronically.

 

Drawbacks of an Online Savings Account

Given below are a few shortcomings of an online savings account:

• Some online savings accounts do not offer the Automated Teller Machines (ATM) facility. This may restrict you from quick access to your money. Even if you have an ATM card, most banks will not allow you to withdraw more than $500 on a daily basis.
• Some people can feel the absence of personal attention since they cannot discuss their financial issues or options in person.

 

Is an Online Savings Account Secure?

Many people believe that online banking is not safe. However, to secure the identity of customers and in order to make them feel safe, banks provide the best available security online. Safe banking sites would usually use a 128-bit SSL (Secure Sockets Layer) or sometimes 256-bit SSL encryption to avoid identity theft.