Online savings accounts compete with traditional banking by offering more savings and accessibility. There are many factors to weigh when finding great online savings accounts. However, there are many online savings accounts to choose from, so find the features you value by taking a little time and mental energy to shop around.

Competitive Interest Rates

Banks are pushing their clients to complete more transactions online as a cost-saving measure. As a result, these savings are usually pasted on to customers as significantly higher interest rates paid on your money. However, when finding great online savings accounts, check to make sure the interest rate remains high over time and does not fluctuate in a way that will not be of benefit to you in the future.

FDIC Insured

Online banking sounds new; the high interest rates and seemingly new companies in the game may look risky. The important thing is these banks are FDIC insured just like regular brick-and-mortar banks. In a nutshell, your savings are 100 percent insured up to $250,000 per institution.

Interconnected

All banking, including bill pay, money transfers and deposits can now be handled through the telephone or computer. Encryption makes banking online safer than sending and receiving sensitive or personal information through the postal service. The savings account can be electronically linked to any of your other financial institutions so that you can easily transfer funds between accounts and institutions, without incurring charges. Banking records can be accessed online for reference and accountability. It does take a few days to transfer funds for use, but banks are creating new PDA applications every day to help streamline this process. For example, some allow you to submit checks by taking a picture with your camera phone and sending it to the bank via a text message. Customer service should make continual improvements with a growing technology and customer response.

Insulated

The three to four day business transfer window, the one hassle in online banking, may actually be an asset when considering the purpose of a savings account. Since Americans have problems saving but not problems spending, having a three- to four-day buffer may give pause before any impulse buys are purchased. The window lets your set the money aside and helps you keep it there. Automatic bill pay, on the other hand, will set up a transfer that automatically takes into account the time window so the bill is paid on time. And if you have a card, you can always withdraw money from an ATM, if required. Any short-comings of online savings accounts are made up in interest rates, low fees and connectivity, making these accounts an effective instrument in your money management system.