Online savings accounts are one of the newest trends in the world of finance, and it’s something you can get involved with fairly easily as well if you value financial management. The important question to answer, however, is whether it’s in your best interests to do so or not.
Pros of Opening an Online Savings Account
Before clicking OK to complete your online savings account application, make sure you weigh in the following factors to know if you’re really making the best decision in your case.
PRO: Online savings accounts are more convenient.
Conventional savings accounts can’t be accessed 24/7 like online savings accounts. And even if there is an online feature provided for them, they’re not as broad as those offered by 100% online savings accounts.
Online savings accounts also allow you to pay for your bills through the Internet provided that those companies offer the same option. With an online savings account, you can make sure you’re paying for your telephone and utility, credit cards, and other regular bills on time.
CON: Online savings accounts mean greater risks.
Of course, the convenience you’re intent on enjoying comes with a price, and that’s banking safety. Online saving accounts are also vulnerable to hacking and identity fraud just like all other online payments and transactions. Banks are, however, doing their best to increase the safety, security, and protection for their members.
PRO: Online savings accounts offer higher interests.
This is probably the biggest and most touted benefit of online savings account. Compared to conventional savings accounts, online accounts will definitely allow you to earn more, thanks to higher APRs.
CON: Online savings accounts are not for the technically illiterate.
If you’re not good at wielding a computer mouse then you might have a hard time managing your online savings account. Unlike traditional savings accounts, there are no banking representatives which you can speak to and relay your requests. Everything, from checking your account balance to making withdrawals, will have to be done online.
PRO: Online savings accounts require lower values for their maintaining balance.
Unlike traditional savings accounts, online savings accounts will only ask you to leave something as low as $1 for your bank account to remain active. That’s not too much to ask, is it? But if you think it’s too high, there are other online savings accounts that don’t ask you for any minimum maintaining balance AT ALL!
CON: Online savings accounts are vulnerable to technical malfunctions.
Remember when Blackberry had a sudden and still-unexplainable blackout? For an alarming number of hours, Blackberry owners were unable to use their phones to access their emails and files. While that still hasn’t happened to online banking yet, there’s no saying it won’t happen in the future. If a company well known for its customer service and reliability still fell victim to the pit traps of technology, who’s to say that a fledgling industry like online banking wouldn’t?
PRO: Online savings accounts do not require you to pay upfront fees.
Unlike other accounts, especially when you’re dealing with any of the established banking companies, you might be required to pay upfront fees just for opening an account. You definitely don’t have to worry about that with an online saving account.
CON: Online savings accounts make it harder for you to have actual cash on your hands.
Well, it is an online account, after all, so expect it to have its “online” feature backfire on it such as in this instance. An online savings account may be easier to manage, but it’s also going to put a cramp on your spending. Then again, that just might be a good thing if you wish to stay within your budget.
PRO: Online savings accounts facilitate transfer of money.
By simply entering the account details of the person you’re transacting with, you can easily transfer money from your account to his. You can do this anytime you want. There is no opening or closing hours for online banks.
CON: Online savings accounts have faceless customer service.
Simply put, you can’t use familiarity as an advantage. If you once enjoyed faster than usual transactions simply because you got along well with the people working in the bank, that’s not going to happen with an online savings account. You’re working with a computer – and not a human being.
In the end, the viability of opening an account will depend on your needs, preferences, and abilities. Good luck making the right decision!
[image from seemadeepak]
Tags: online savings accounts, save money, online banking
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