Fresh Finance: FREE MONEY, online savings account required.

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At the suggestion of a friend about a year ago, I opened up an online savings account with ING.  Initially, I was skeptical and apprehensive, but after doing some research I was a lot more curious to see just what all the hype was about.  The thought of storing my money “online” was extremely terrifying but I opened an Orange Savings Account and haven’t looked back.

Why should you open a savings account online?

Everyone needs a place to store their cash. Keeping your money in the mattress is not realistic and even worse, it pays 0% APR.  The biggest draw of opening up an online savings account is the higher APY (Annual Percentage Yield) it pays.  Depending on the criteria of the account you open, you can start earning interest on your balance even if it’s just a penny. The higher the balance, the more interest you earn.  So why would you keep your money in a bank account or mattress that pays little to no interest? Most banks pay between .05-.25% for their various types of savings accounts. Most online accounts pay well over 1% during down financial times and over 2% during high times.  Regardless, they pay at least four times as much as your typical bank sponsored savings a

So how do you go about finding and selecting an online bank account?

First, you need to do some research and check around to see who is offering the best rates.  Check www.moneyrates.com for a listing of the top 50 highest rates for the day and who is offering them.  The site monitors over 200 banks so you can rest assured you are getting the best rate possible.  According to About.com, when evaluating which online account to choose, use the following key considerations:

1. High APY
2. Access to Money – how easy is it to get your money in times of need?
3. Number of linked accounts – how many accounts can you link and how difficult is it to transfer money?
4. Additional products and services available like CDs, mortgages, or ability to pay bills online.
5. Leverage of existing banking relationships – are there any perks for keeping all your accounts under one roof?
6. Customer Service – how easy is it to get questions answered?
7. Automatic savings plans.  Can you setup an automatic recurring deposit schedule?
8. Safety and Security – is the bank FDIC insured and do you trust their security process?

So how do you actually go about setting one up and managing the account along with deposits and withdraws?

Obviously, you can’t just walk up to a teller and deposit or withdraw cash if you have an online bank account.  But that’s the beauty of the whole thing! You don’t even have to change out of your pajamas to do your banking, just log onto your account via the worldwide web and make whatever deposits and transfers you need to without dealing with long lines and slow service.  Since your online account is already linked to an existing bank account, you can access your cash in a breeze.  Not near a computer? No problem, Visa/MasterCard debit cards are available for use at ATMs all across the world.

You have mainly three options when it comes to deposits and two when it comes to withdrawals.  To make a deposit, you can opt for direct deposit via payroll.  You have to contact your HR Department to set up the account but the service is free.  Second, you can initiate deposits to occur on an automatic schedule based on your criteria.  You can select to deposit funds once a week, once a month, or every 20th of the month and for how much.  The control is up to you.  Lastly, you can initiate one time deposits from other linked bank accounts.  Most online providers allow you to make these transfers by phone or online.

As far as withdrawals are concerned, you can use your Visa/MasterCard debit card at thousands of locations across the world, or you can initiate one time withdrawals to a linked bank account that is more convenient to you for access.

So what are you waiting for?

Article by Kevin Breckenridge

Helping to raise the financial conscious of those who are consciously aware of the necessity to obtain financial freedom. Through education, exposure, open discussion, and action we can eliminate the financial strain on our pockets. Doing so will allow us to build the capital and asset portfolio necessary to truly enjoy our life as well as elevate the launching pad for our future generations. Follow me on Twitter @Legacieinmotion

Kevin has written 32 article(s) for us.