Monday, April 03, 2006

Online saving accounts

In the past few years, there has been a slight increase in the use of online saving accounts. Sadly, not many people still realize the benefit of this service. People like to think that online transaction is still not safe and thus, leaving online saving accounts behind. Therefore, should we use online saving accounts? This article will answer this question.

What is online saving accounts?

Actually, this service is just the same as other saving accounts but, all of the transactions are to be made online. That means you can still keep your day-to-day bank accounts and use online saving accounts as a place to save some portion of your earnings. Online saving accounts has many advantages compare to the ordinary saving accounts. This will be discussed in detail below.

Online saving accounts’ advantages

Usually, online saving accounts offers higher interest rates as they can operate in more cost-efficient manner. This is because they do not have to have large number of man power to run the service. They can also save the cost of establishing lots of branches as all of the process can be done at one branch. Therefore, they experience low level of handling and operating cost. Then, public will be the one who enjoy the benefit as we can get higher return of investment from higher interest rates.

And as all the transactions done online, we do not have to go the bank branch to do the money transfer to our saving accounts. I do realize that nowadays, many bank offer automatic fund transfer in which money will be transferred automatically from current accounts to saving accounts. But, this option usually will be charged as a service charge. As far as I know, there are many online saving accounts that do not charge any service fee for this service.

Usually, online saving accounts allows you to withdraw your money anytime you want. And some of them even calculate the interest in daily basis. That means you will earn higher than if you save your money in the saving accounts that count your interest in the monthly basis.

Is there any disadvantages?

Of course. There is nothing in the world that is so perfect. Online saving accounts also has some disadvantages. One of them is as all of the transactions are done online; security is the main issue that holds people from opening this accounts. They said that there is a potential of losing some money if they using this service. But, recently, many of the online saving accounts providers have upgraded their system so people will feel safer when investing with them. For example, Raboplus, the online saving accounts that I use, has high level of online banking security. The main bank, Rabobank, has been voted as the world’s safest private bank in 2005 by Global Finance magazine; the world’s leading finance magazine.

What should you do?

If you convince that online saving accounts is the best choice for you, find one and start saving today. If you want to enjoy the higher interest from your hard-earned money, go fro online saving accounts. You can find online saving accounts quite easily. Just search for this service using major search engine like Google, Yahoo or MSN and compare the features before you start your online saving accounts. Remember; think first before you make any choices.


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