Making the Switch

  by Tyler Curtis

by CareyAnn Peterson

Every Monday morning, Richard sips on his morning cup of joe and reads the newspaper while waiting for his bank to open. At 8am sharp, he heads to the local branch of his bank and withdrawals the cash he needs for the week. His favorite teller at the bank welcomes him by name and immediately begins to pull up his account information to begin his weekly transaction. Richard leaves the bank with a smile on his face and money in his pocket.

Richard has been banking this way for as long as he can remember. Would he be willing to change his weekly routine if he could save both time and money? Opening an online savings account could allow him to do just that.

If you are like Richard, you might want to consider the benefits of opening an online savings account

1. Enjoy Higher Interest Rates: Ally Bank, ING Direct Online Savings, and American Express all offer High-Yield Savings accounts with no monthly fees or minimum balance requirements. These particular accounts are also FDIC Insured so you can feel secure when depositing your money. This type of account is a great place to store cash reserves like your emergency fund.

2. Flexible Customer Service: Many of these online institutions offer 24/7 support. You can open your account, place transfers, and receive customer support at any hour of the day. You will no longer be limited by the lobby hours of your local bank.

3. Convenience: You can link your online savings account to any of your bank accounts making transfers and deposits a breeze. You will have 24/7 access to your bank statements without ever leaving the door-step. There are also applications that allow you to take your banking mobile with smartphones, iPads, and laptops.

You may be wondering why these banks are able to offer higher interest rates. By offering their products online, these institutions are able to eliminate a lot of the overhead costs associated with brick and mortar banks. Also, they have greater access to the public allowing them to build a bigger customer base compared to your local bank.

When choosing where to open your online savings account, consider the following

– Make sure there are no minimum balance requirements or initial deposit requirements

– Compare interest rates to make sure you are getting a competitive rate

– Find an institution that is FDIC insured with 24/7 support

Although Richard enjoys his Monday routine, he can save time and money by opening and managing his savings account with an online institution. You can evaluate your own banking fees and see if “making the switch” could benefit your plan for building your savings.

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