Sunday, January 12, 2014

An Online Savings Account is a Safe Way to Help You Earn More Money

As you get older it is a pretty good assumption that you want to keep your money as far away from risk as possible. While you are still bringing in income it is hard to keep moving money that you don’t need to spend in and out of safe investments. And then when the time finally does come that you need the cash you want it to be as liquid and as easy to access as possible. One of the safest investments out there is a savings account. But it is also one of the lowest returns that you can earn on your money as well. But what many people don’t know is that there are online banks out there that offer savings accounts that offer interest up to 10x higher than what traditional banks offer.

What is an Online Bank?

Online banks offer the same products and services that traditional banks offer minus one thing. They do not have brick and mortar buildings all over the country for you to visit. Because of this they save a lot of money in overhead by eliminating staffing and the upkeep of buildings and they pass these savings on to you in the form of interest and lower or no account maintenance fees. There are even online banks that are offering cash bonuses just for opening an account.

How Can I Get My Banking Needs if There is No Physical Bank I Can Visit?

Technology is advancing everyday and if you take advantage of it then your life will become much easier. You can open an online savings account from your home computer. You can then link your online account to your current checking account (at your traditional bank) and transfer money back and forth for free. Online banks have 24/7 online and phone support so that you can have any questions that you have answered. And if you need to deposit a check you can do so with a smartphone and get the same results as you would at the teller or ATM. If you already take advantage of all of these things with your traditional bank then you probably don’t have to drive down to the bank anyway. And online banks have a network of ATMs all over the country and some even refund you ATM fees if theirs is not available.

Utilize an Online Savings Account to Make Less and Earn More

The heading is correct. You can utilize an online savings account (or any savings account, you will just earn the most interest with an online savings account) to earn less and make more. And you can do this by utilizing your direct deposit paycheck that you receive from you employer or wherever you get your income from. On your direct deposit form you can designate where you want the money from your paycheck to go. You can apply this to multiple accounts and then designate how much you want to go to each account. Now you just need to determine how much less money you can love off of each week. Then have that amount sent to your online savings account each paycheck. The key is to set up your direct deposit this way and forget about it and never remove money from your savings account unless you need it. So lets say that you can live on $100 less per week (that’s one less dinner dining out for a family of 4). So if you can make it 1 year without needed to withdraw any money from your savings account you will have $5,200 saved up plus the interest that you earned and plus any signup bonus that you received. Not bad for tricking yourself that you were earning $100 less a week.

Keeping Your Money Safe and Earning More

As you get older you don’t want to put your money in volatile investments that will have large swings up and down. Yes you have the potential to earn less but if you mistime the market than you could be looking at a lot less money. $100 a week (or whatever you can afford) is not going to drastically change your main investment strategy. And knowing that your money is in good place, safe from losses, will allow you to sleep better because you have a good pile of cash ready to go whenever you need it. And if you want to invest the money but are not sure where the market will go. You can wait for the right buying opportunity and then you will have a good base to invest and hopefully give you the growth that you want.

Matthew Coan is the founder of the financial website Helping users find the best credit cards, checking accounts and savings accounts to help them earn more money. 

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