A savings account is one of the simplest types of bank accounts. It is a deposit account opened at a bank of your choice in which the deposit accumulates interest. A savings account can be used to deposit your money in a safety deposit and lets you use the funds as and when required. However, banks can limit the number of withdrawals from your savings account. They may also charge you if you fail to maintain the minimum balance per month. Having a savings account is more effortless now through the use of technology and can be maintained online as an Online Savings Account. The first question that we will address is what is the difference between the two and how does a person open an online savings account.
An Online Savings Account is similar to a traditional savings account. The only difference is that it is managed online. There are many benefits that come with an online savings account. The foremost being that it can be accessed anytime and anywhere as and when funds are required. It has become more user-friendly for people to have a suave user-friendly experience which is just a click away. Also, it is characterized by higher interest rates as compared to the traditional ones.
Prominence Of Online Savings Account
What do banks actually do? You deposit your money with the bank, they take it and lend it to other clients in the form of loans. At the same time, it offers you interest on the money deposited. That is core of a savings accounts. With the advent of the internet, everything has been made accessible online and this is not an exception to this trend. If you want to save money in a prudent and convenient way, you should definitely opt for an online savings account.
Online Savings Account
Banks that offer Online Savings Account can either have physical branches or they may be an online-only bank. These have no physical branches and are only available for online service. This doesn’t make the process of depositing and withdrawal any harder. Instead, there is just a special process that needs to be followed for the same. In banks with branches, the money for savings account can be deposited simply through cheques. For the online accounts, they can deposit through ACH transfer, mailing in a cheque, or direct deposit. In the case of withdrawal, a customer can stick to ACH transfer into another account. Alternatively, they can ask for a cheque from the bank itself for the amount that needs to be withdrawn.
Due to rising interest rates, Online Savings Accounts are becoming more and more preferable. This allows for an emergency fund for circumstances beyond your control.