Personal Online Savings Account
A savings account is an account that you use to save money. An online savings account is just like a savings account with the exception that all your savings account transactions are done online, like transferring money into an online savings account or out of the account.
Doing your savings transactions online saves you a lot of time. Before the invention of an Internet savings account you had to visit a local bank branch to do transactions, you don’t need to walk into the bank to make a payment or withdrawal money.
Another great benefit to an online savings account which also is known as a high interest rates account is the interest rate is higher with online savings than with a regular savings account, interest rates are higher because banks save money by doing all their operations online.
Without having to pay rent for bank locations the bank saves money. In addition to saving money on real estate online banks also save money on salaries. The bank’s office can be in a part of the county where costs are lower. The online banks than pass these savings onto depositors in the form of higher interest rates on savings accounts and certificate of deposit accounts.
In one aspect that both regular savings accounts and online savings account rates are is same is they both are variable rate accounts. Variable rate means the savings account interest rate you receive can change, unlike a certificate of deposit where the rate stays the same.
With online savings accounts you are limited by Federal regulation to a maximum of six withdrawals per month, just like a traditional savings account. If you go beyond six withdrawals per month you risk having your savings account closed by the bank. Both savings accounts and Internet savings accounts are insured by the FDIC for up to $250,000. .