With such an emphasis on savings these days, it is almost impossible to not be exposed to the savings options that are now available thanks to technology. Specifically speaking about online savings accounts, this option for savings can be one of the best you can implement into your financial planning.

Here are 5 reasons why you need to have an online savings account:

Bank Interest Rates Not So Good
Check the interest rates with your banking institution and then check around with other local banks. Chances are good the APY will be really low when compared to online accounts. Do a search for high-yield savings accounts and you can probably find several with2% APY and above. While the interest will not make your filthy rich all on its own, it definitely will earn you more money that you will find at traditional banks.

Automate Your Savings Plan
With an online savings account, you can most likely set up an automatic deposit electronically from any other linked account you have online. If you anticipate your paydays as every other Friday, you can set you savings account to automatically pull over a deposit each time your paycheck is deposited. Once you automate your deposits, you no longer have the chance to spend the money before tucking it away. Plus with the automation, you can essentially set it and forget it. You don’t have to try hard to keep up with our savings account, making you more likely to actually save.

Not Too Accessible
When you have a traditional savings or checking account, you can easily access the ATM on both accounts using your debit card. Not true with an online savings account. Because you can easily pop over to an ATM to get at your money, you may be more inclined to leave it where it is, earning interest.

Set Up Bill Pay
Many online accounts allow you to pay your bills directly from the site. While you can do this also with traditional checking accounts, the money you keep in there for monthly expenses doesn’t earn as much as your online accounts. By setting up online bill pay, you can help avoid missed or overdue payments which rack up late fees and interest charges, costing you more money that necessary.

Establish Multiple Accounts
There are some online savings accounts that allow you to set up several accounts under one account number. You can designate these additional accounts for specific purposes, such as vacation, car purchase, or emergency savings accounts. You can redirect deposits into each account automatically, giving you more incentive to save more often.

Tags: APY, bill pay feature, online savings accounts

This entry was posted on Tuesday, March 3rd, 2009 at 8:23 am and is filed under tips. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.