Benefits of having a savings account at an online bank include higher interest rates, lower fees, peace of mind and around-the-clock support. However, online banking may not be ideal for people with limited computer access or who make frequent withdrawals and deposits.
Online savings accounts typically offer higher interest rates than traditional brick-and-mortar banks. Online banks have less overhead, allowing them to pass on the savings to their customers in the form of better interest rates. Customers should monitor banks' interest rates to stay updated on fluctuations. It may be necessary to change banks if the interest rate is falling consistently, especially in comparison to other banks.
Online banks also typically charge lower fees for monthly account maintenance, checking overdrafts and most other account-related services. Many online banks also offer free services, including billing.
Having an online account reduces the chances of impulse spending or spending on non-emergencies. Although clients are issued with debit cards, it can take up to two days to transfer funds from an online savings account to another bank. This period may be sufficient to rethink a purchase.
Online savings accounts allow users around-the-clock access to their funds. It is possible to transfer funds or view the account balance from anywhere and at any time with a computer and Internet connection.