Traditional banks currently offer a very low savings account interest rate. A quick search of high yield online savings accounts will reveal some extremely attractive interest rates. These rates are generally much higher than the traditional brick and mortar banksâ€™ rates. There are a couple of reasons why online banks can afford to offer these higher rates. Online banks have less overhead and pass the savings on in the form of higher rates. Online banking is highly competitive and strives to provide the best rates and incentives. A few strategies will help the potential customer make the best selection when shopping for an online savings account.
Safe and Sound
The first consideration is security. It makes no difference how high the interest rate is if the bank is not safe. It should be a member of the FDIC. This guarantees that its deposits are insured in case of bank failure. Typing in search terms such as â€œrate my bankâ€ will return sites that do just that. There are classification systems that rate the bankâ€™s soundness and security. Exercise caution with banks that are not on a sound footing.
Accessibility is another key feature. Inquire if it is easy to deposit and withdraw funds from the account. The best method is when the online savings accounts are linked to the customersâ€™ checking accounts. This makes it easy to move money from one account to the other. Be aware that online savings accounts usually have a limit on the number of withdrawals per calendar month.
When comparing one online savings account interest rate with another, some things should be considered. Are they introductory rates? If so, find out when the rates expire and what the rate will fall to after expiration. If the details are vague, pass on it. Check for any maintenance fees or low-balance fees. This information is usually in the fine print at the bottom of the page. Some accounts require a minimum balance to qualify for the high interest rate. Some banks provide bonuses or incentives to make their offers more attractive. It could be a monetary bonus for opening an account by a deadline. There could be an offer of a percentage with interest earned each quarter, for example, a quarterly bonus of 10% of the interest earned deposited in the account.
Online banking is a convenient way to manage funds. The Internet makes bank transactions possible 24 hours a day. Arrangements to transfer funds can be made in the middle of the night, on holidays and weekends. To get the best savings account interest rate, compare various offers, double check the terms and verify that the online bank is safe and sound.