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Internet banking offers the convenience of banking electronically from your computer. And because institutions don't pay the operating expenses to keep a local branch open, online Savings accounts also offer some of the highest interest rates available. Here are some tips for finding the best internet Savings Account out there.
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Use a Comparison Website
Rate-comparison websites search the internet for the top advertised internet Savings account rates. Try www.bankrate.com, or a similar search engine.
Bank with a Reputable Company
In order to open an account with any financial institution, you must disclose your name, address, social security number and date of birth. When you open an online account, there is usually an option to enter a routing and account number for an existing bank account, so that you can initiate transfers between the two accounts. Before you submit your personal and financial information to a website, verify that you are dealing with a reputable company.
Many national banks such as JP Morgan Chase and Citibank have online savings rates that are higher than what is offered at their branches. Some credit card companies also offer online Savings accounts. Looking first at companies with which you have an established business relationship will go a long way toward protecting your identity.
Beware of Fluctuating Interest Rates
Many online Savings accounts offer an attractive interest rate to open an account, but drop the rate once they have your money on deposit. Before you open the account, read the fine print. Check to see how long the advertised interest rate is guaranteed, and also if there are any qualifications such as a minimum balance or transaction limitations that will change the rate if they are unmet.
If the interest rate for the Savings account you choose is subject to change at any time, periodically review the rate listed on your statements. When the interest rate drops below what is competitive, it may be time to close the account and move your money to another institution.
Budget Time for Transfers
If you're transferring funds back into your local checking account, it's best to leave a few days in between making the transfer and spending the funds. A transfer made electronically could take three to 5 days to go into your account. If you have paper checks or withdrawal slips from the online account, be aware that your local bank can place a hold on your deposit for up to 11 business days if the deposit is outside your normal banking activity.
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