|
Managing an online savings account is actually easier than managing
an offline account. Here are the basics:
Deposits
When you want to transfer money into your account based on the
bank you have chosen, you can mail in a deposit, make a deposit
through your checking account by transferring money, or make a deposit
through your ATM. The biggest misunderstanding that people seem
to have when first getting a savings account online is that they
do not understand why you can not make deposits at your local branch.
This is simple; the point of giving you the higher interest is rate
is because banks are trying to cut down on paperwork. If you need
that feature, do as I do and go for a bank that allows you to make
deposits via an ATM.
Withdrawals
Some banks give you many choices with this one. I find that banks
with the highest rates often provide you less access to your money.
Almost all banks allow you to make electronic withdrawals to your
linked checking account. But, remember every time you do this you
are losing about 2-3 days interest. The money from your online savings
account is not instantly transferred to your checking account. This
is why I never deposit money into my savings account unless I know
it will be there for more than a month.
Automatic Transfer
Another feature they offer that I would caution you on, because
we are all human, is automatic transfers. You can setup your account
up to transfer money to or from your checking out ahead of time.
This is great, if you know for certain the money is going to be
in each account.
Banks also allow you to setup an automatic savings plans where
they will removed a fixed amount of money from your checking on
a regular basis. If you are undisciplined and you are taking out
a small amount of money, this may be a good idea. I'm turned off
to this feature. Honestly, if you are disciplined enough to take
your money out of a traditional savings and place it into an online
savings, I'm sure you can decide when your money should be moved.
I have to say that this is a great way to save for my kids. I always
forget to give them their allowances, this way I can't. Of course,
I'm sure ING is not loving the one and dollar transfer I have setup
for them every week.
Breaking Up Your Account
A very cool feature that you will only find with online banks is
that you can subdivide your account other accounts. For example,
I have 2 children instead of opening an account for each of them
I have taking one of my online savings accounts and added two subdivisions
one for my 4 year old and one for my 2 year old. So on paper, it
looks like 3 accounts. When in fact the bank counts it as one, but
I now know exactly how much of that money is for each child.
This feature is great for goal oriented savers. You can name projects
or purchases and put a little bit of money to them every so often.
Statement Periods
This is the time of the month when banks actually pay up. Statement
periods differ, you'll get accustom to each bank as time goes on.
The banks bases the interest they give on the length of time of
the period (usually 29-31) and the average amount you had in the
account for that period.
One thing to be aware of is that all banks usually send you an
email letting you know your statement has posted with a link to
click to login. As always, I would delete these emails and never
follow the links. If I want to see my account I'll visit the site
myself. It is only a matter of time before Phising gets so good
that they time the account statement emails with their scam emails.
|