Online savings accounts have been working for consumers for a number of years now, and their popularity is only increasing. If you’re a part of the population that hasn’t yet made the leap, the following perspective from Rory Brown, Managing Partner of Nicklaus Brown & Co., may convince you to open an account.
People Don’t Like To Change Banks
Opening a virtual savings account is not only easy; it’s less complicated than opening a traditional account. You need only visit your chosen bank’s website, find the “open an account” section, and fill in the required fields on their user-friendly form.
Earn Real Interest On Your Money
According to the FDIC, savings accounts with a standard brick and mortar institution are currently earning less than 0.10% on average. This means if you have $100,000 invested at the beginning of the year, you’ll earn $100 in interest a year.
Virtual savings accounts pay significantly higher interest rates because they don’t have the overhead costs of brick and mortar branches. As a result, you can currently find virtual savings accounts paying interest as high as 1.85%. At that rate, your $100,000 will earn you just under $2000 by the end of the year.
Not only can you make more money with a virtual savings account, but you also don’t run the risk of losing it the way you often do with traditional bank accounts.
Most virtual savings accounts don’t carry minimum balance requirements. They also generally don’t require a minimum number of direct deposits or other transactions. That means you can invest whatever you have and grow it over time without worrying about losing some of it to fees.
Your Savings Are Accessible
People fear they won’t be able to access their money in an emergency quickly. That may have been true years ago, but it isn’t any longer.
Not only is it easy to transfer funds from an online savings account to a traditional account for withdrawal, but modern online banking apps and cashless payment methods are making it simpler than ever to access your savings.
About: About: Mr. Rory Brown has focused on financial technology and investment management for 30+ years. Rory Brown Co-Founded one of the world’s first Virtual Banks and writes extensively about the industry.