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If this is your first time contemplating opening a online savings
account you must realize that online savings are great for growing
your money, but making deposits can be a bit annoying. Banks offer
great rates with online accounts because their over head is ridiculous
low with these types of accounts. In return for the great rates,
you are going to have to take an extra step to get your money into
the bank.
The most common way to make a deposit is to link an existing checking
account (from just about any bank) to your online account. To do
this you provide your online savings account bank with the account
number and routing number of your existing checking account. They
then make a series of small deposits to this account to verify that
the accounts are linked. In the online savings account world this
is the old faithful method of making deposits in fact many online
savings banks site this as their customer's main method for making
deposits.
Many online savings banks are now allowing you to mail your deposit
or use a branch ATM to make deposit. I find mailing in deposits
is rather slow. It usually takes five to seven business days until
I see the money in my account. ATMs are much quicker I usually see
the money in the account within 48 hours.
I really love the ATM feature, it makes me feel like my bank is
open twenty-four hours. This is a big reason I really like HSBC.
I have a branch five minutes from my house.
One thing I caution people on is moving your money into your online
savings account for too short a period of time. If you know that
you the $1000 that you put into your online savings account is needed
in less than a month, it might not be worth your time or even worse
lose you money. When ever you make an electronic transfer from one
bank to another, each bank has a transfer period that can range.
But, during that period you usually lose about two days interest.
So let's say you have a savings account in a local bank that collects
2.75% interest. You transfer that money to your 4.5% online savings
account. There is a two day period where you are not collecting
any interest at all, while its being transferred to your online
account. If you need that money right away, you just lost two days
at 2.75%. A good rule of thumb is to make deposits that will stick
for at least a month.
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