How An Online Savings Account Can Make You Money
Did you know there are savings accounts that give you higher than normal interest rates? You may already have a savings account where you put money away and make $2 in interest a year.
Saving money might be the most boring financial advice you’ll ever receive but it’s some of the most important.
Having a saving account matters because that’s where you put money away for important long-term purchases such as your house, car, and things of that nature.
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Bonus: How a High-Interest Savings Account Can Benefit You
How Online Savings Accounts Work
Most people already know they should be saving money, but there are savings accounts out there that have higher interest rates than what you earn at brick and mortar banks which help you grow money without doing too much work besides opening the account and depositing money.
You just need to know where to look to find them.
These savings accounts have no monthly fees, no minimums and pay you a good interest rate. But the best feature of this savings account is it makes your money works for you.
That means you can make money just for having money.
Because it’s a savings account you cannot make excessive withdrawals. (No more than 6 a month)
Our banking system also takes a long time for money to be transferred between banks. I recommend keeping your spending money in your checking account. Larger purchases need to be planned for at least 3-5 business days in advance so it gives it time to be moved into your checking account.
Having an online savings account makes it IMPOSSIBLE to impulse buy because it takes days for the money to move into a spending account.
The reason behind why big banks offer lower interest rates to its customers is because they have to pay for buildings, expensive vaults, & people to tell you where to put your money (probably someplace that’s going to make THEM a lot of money).
Online banks don’t have any of those things so they pass their savings off to you in the form of higher than normal interest rates.
For example, if you were to keep your money in your regular savings account you would make $1 a year for every $10,000 you have. That’s because regular savings accounts typically have a .01% interest rate.
If you were to put that same $10,000 in an online savings account with an interest rate of 1% you would make $100 a year for just having a bank account. It’s easy money.
Personally, I use Discover for my savings account because of their great customer service and their 1.75% interest rate (as of July 21st, 2018)
The best part is after you set up the account you just sit back and watch the money pile up.
The 3 things you need in a savings account
- It’s free. There’s no need to pay a bank to hold your money. (They make enough already)
- It’s at a bank you trust. You wouldn’t give your money to someone sketchy. If a bank doesn’t have excellent customer service you probably shouldn’t trust them with your money.
- Connects to your account easily so you can automate transfers or make them on your phone.
Next Step: Open a savings account