Cybersavings-Online Savings Accounts
May 19th, 2007 by alyoung
I now pay almost all my bills using online banking. Its convenient, and much easier than writing checks. I can also pay my bills from anywhere even when I travel. Or set it up to pay reoccurring bills each month, so I don’t miss a payment. Online bill paying is a great service, but the only drawback is that the account at the bank pays very little in interest.
In order to get higher savings rates on my money, I have gone online to find Internet banks. These are banks available online that pay far higher interest rates on savings account than traditional banks with local branches. These banks are all FDIC insured just like any other bank. ING Direct was a pioneer in high yield savings account, but now there are many others. I use Emigrant Direct which is currently paying 5.05%. I like Emigrant Direct because it is always very competitive with its interest rates, and does not have a minimum balance requirement. The same is true with HSBC Direct. Some banks may pay higher interest rates, but only for a limited period, or require a minimum balance. I prefer to keep it with one bank, rather than always transferring money to pick up a few points on the rate. For the latest in high online rate check out these sites:
I still maintain a checking account at my local bank to keep the banking relationship for loans and lines of credit, but I only keep a minimum balance to cover my checks. My checking account is linked to my online savings account so I can easily transfer money online to my checking account when needed. I make deposits at my bank, and transfer the excess I don’t need for checks into my online savings account. With the ease of transferring money among accounts, it does not make sense to keep savings at your local bank. If you do, it is costing you a lot in interest. That’s free money.
UPDATE: Check out updated info on Citibank Savings Account which will credit you $100 for opening an account along with competitive interest rate of 4.65%
Just wanted to say thanks for the info on bankrate and piggybank. I spent about half an hour on piggybank, which I’d never heard of before, and got some good info. Cheers.
Thanks for stopping by. Please visit again. I’ll be sharing some more useful information on online savings accounts shortly.
[...] 21st, 2007 by alyoung Following up on my articleon the superior savings rate you can get at online banks versus your traditional local bank, I have [...]
[...] Cybersavings - online savings accounts - I’m a big fan of them [...]
I have to agree with you, online bank accounts are great but you have to a local bank account in order to send money to those accounts. I myself have HSBC tied with my local credit union and it’s a great combo, i use my debit card from credit union to pay for regular stuff while the bulk of my money sits and earns interest.
Oh, i forgot to mention great article!
Thanks for stopping by. Here is a great online savings deal. Check it out.
http://alyoung.wordpress.com/2007/05/21/100-free-money-by-opening-a-citibank-savings-account/