If you have ever heard me speak or teach about saving money, then you have undoubtedly been introduced to online banks. I’m not talking about banks that have websites but about banks that have little to zero physical “bricks & mortar” locations.
Here are 5 reasons why I use online banks (over a local bank) for my savings accounts:
- High Interest – These banks pay interest equivalent to a 30-month CD, but none of the CD restrictions exist (early withdrawal penalty, terms, etc). Currently, these accounts are paying interest between 0.75% – 0.99%. That’s WAY BETTER than the .01% that most local banks are paying on simple savings accounts!
- No Minimum Balance – While most of these banks require a small minimum amount to open an account, they do not have a minimum balance requirement going forward. This makes it perfect for any and every saver.
- Sub-Accounts – These banks allow you to create “named accounts” within the main account so you can better track your savings for various items. For instance, I have sub-accounts named: “Business Operating Reserves”, “Christmas”, “Vacation”, “Property Taxes”, “Life Insurance”, and “Emergency Fund”. When I log in to my account, I can instantly see how much I have saved for each of these items.
- Customer Service – I’ve experience nothing but the best service from my online banks. If you think about it, they have to have really amazing customer service. After all, they don’t have local branches. The only way they can attract and retain customers is by serving each customer extremely well.
- No Fees – I’ve never been charged a fee by my online bank. No once.
- BONUS – Automatic savings – you can create automatic transactions that draft money from your regular bill paying bank account on a frequency that works best for you. I have established automatic monthly drafts so I don’t have to “feel like it” to ensure I save money each month! These banks are also FDIC insured so your deposits are protected.
I encourage you to click HERE for the banks that I recommend. Choose the one that suits you best and get your savings automated!
Already use a Savings Account with an Online Bank? Tell us what you like most about them?