If you are looking to save money for emergencies, rainy days, or large purchases, then you may be interested in opening up a savings account with an online bank. These online savings accounts have a variety of benefits, including lower costs, higher interest rates, and the added convenience of online banking.

Lower Costs

One of the best reasons to choose an online savings account for your personal banking needs is that online savings accounts typically have lower fees and costs than brick and mortar banks do. Online savings accounts are much less expensive to run than regular savings accounts. They typically have little to no buildings to pay rent or mortgages or utilities on, nor many employees to pay. Regular savings accounts can cost upwards of $5 a month for maintenance, which isn't much per month but adds up to at least $60 a year you could be saving. Meanwhile, online savings accounts frequently don't charge a fee at all.

Higher Interest Rates

Another great reason to open an online savings account is that the interest rates are higher than regular savings accounts. The average yearly interest rate on savings accounts is around .06% a year as of 2019, and rates drop every time there's a recession to encourage spending over saving. You would need to have $10,000 in a savings account to earn $6 in interest. However, online banks have lower costs and can, therefore, afford higher rates, and they frequently have accounts with over 1% APY. This means your personal banking earns you more money, passively, than it otherwise would, while also defending against inflation.

Online Ease Of Access

Finally, one of the best reasons to use an online banking service for your savings is that you can immediately access your bank account information without any wait. You don't need to go to a physical bank location to try to open a certificate of deposit, a new savings account, or to initiate a transfer of funds. All you need to have in an internet connection and the information you need to log in. Many regular banks have online services, but there are limits to how often you can transfer money out of a savings account. This ease of access that comes with online savings accounts can make personal banking much easier.

If you are shopping for different personal banking options, you should consider an online savings account. These accounts are typically cheaper, pay out more, and more convenient for the average person. They can make personal banking far easier than it would be otherwise.

For more information, reach out to a local personal banking service.