Opening an internet savings account makes it easier than ever to get the absolute highest interest rates for your money. Of course, the internet is a huge place and you don’t want to spend the next month trying to narrow down your choices. There are many helpful resources that can help point you in the right direction.
Bankrate.com is probably one of the best resources for finding your new online bank. They offer up to the minute information on the interest rates available at each online bank. It’s kind of like one stop shopping.
Once you’ve checked out the interest rates the next thing you’ll want to do is go to the website of each of the top three banks. Interest rates are only one part of the overall equation. There are other things to consider before you plunk your money down.
First of all, find out how much money it will take to open an account. For the most part, the more money you have when you open your account the higher the interest rate you will receive. So, if you have $5,000 to open the account with you will make more in interest than if you only had $500 (many of the higher paying accounts won’t even let you open an account unless you have at least several thousand dollars. Check with the bank you are considering).
You will also want to know how much money you will need to keep in your internet savings account. Many accounts will require you to maintain a minimum balance. Make sure that you can do that, maintaining a minimum balance will mean that you might not have as much access to your money as you would like, take that into consideration.
Make sure that the bank you choose is FDIC insured. Yes, even online banks can be FDIC insured, if one of the banks you are comparing isn’t, cross that bank off the list. You might as well have as much security for your money as you can get.
OK, now that you’ve figured out which online bank you want to open an account in, the next step is to decide which type of account you want to open. You have many choices but for many people it will come down to a regular savings account or a Certificate of Deposit (CD). As with most things, each has it’s own good and bad points.
A CD will pay you more in interest than a regular savings account, but there is a reason for that. The reason is that you will have to agree to leave your money invested for a specific length of time, the term. You can choose how long of a term you want, the longer the term the higher the interest rate. And yes, there is a substantial penalty for early withdrawal.
A regular savings account won’t pay as much in interest but your money will be much more liquid. You can get it out pretty much anytime you want to without a penalty (though many banks will require that you keep a minimum balance).
When it comes to opening an account, don’t overlook the benefits of opening aninternet savings account, you can make a lot more money online than off.