An online savings account is the same as a regular savings account; you just have access to it from the comfort of your own computer or smartphone. The account is through your bank and therefore has all the same restrictions online as it does in person at the bank.
The Basics
The exact method for setting up your account is going to depend on which bank you use and whether you are transferring an existing account to the Internet or opening up a new one. However, most banks have very simple instructions, and you just need to click a link to start it up. You'll have a username and a password to enter your account information.
Safety and Security
Some are skeptical about transferring money and storing personal banking details online. Ultimately, ensuring that your account has not been hacked is your personal responsibility. Setting up an account through a reputable and well-known bank is best. Generally, you can use the same bank that you work with in-person; the only difference is your information will be available both online and at the bank. You need to check it on a regular basis to ensure that no unauthorized withdrawals have been made from the account.
Rules of the Account
Just like the regulations governing your physical bank account, the same is true for your online savings account. Some will require that you maintain a certain level of money in it at all times. If you dip below that amount, you could be charged a fee, or the account might be closed. Additionally, you need to look into transferring rules. However, there may be a limit on the number of withdrawals allowed each month or year. Generally, an online transfer counts as a withdrawal, so you need to know if you have any restrictions.
Making Money with Your Account
A savings account helps you to store your money while also building funds during the process. Find out how much interest you are eligible to receive from the account. Comparing interest rates across different banks is a smart way to decide if you are going with the right option. The limit on withdrawals can also be a useful limitation to help you to keep money in the account. Furthermore, find out if it is possible to have a portion of your direct deposit check delivered to your savings account every time you receive a paycheck.
The benefit of using an online savings account is the ease of use and constant availability. It provides greater access to your savings and can save you several trips to the bank. The important thing is to examine your account restrictions carefully, and keep a close eye out for any unauthorized changes.
