Open an Online Only Savings Account
Right now. If you do not currently own an active online savings account you’re not taking advantage of free money. In fact, you’re actually losing money by not keeping up with inflation. Within the next few days you must open an online savings account and make sure you transfer money into it! Make sure you pick a bank and account that is FDIC insured and be careful to avoid any fees or minimum balances. Below I’ll mention a list of banks with online savings accounts that meet these criteria.
The dragon knows to save...do you?
Photo credit to m.prinke.
As I mention in my about section, my online savings account brings in $50 a month, which is no giant treasure, but it pays for almost my entire monthly iPhone bill. Considering the recent crashes in the stock market, I’ll gladly lose the extra 2% or so the market generates over time for the guarantee that my money is safe and secure. Over the course of history, the stock market generally returns a 5-6% rate per year. As these online savings accounts are right now offering a rate around 3% and were up to 5-6% earlier in the year, they’re a great way to save and at least keep up with inflation, all while knowing that your money is safe and sound with the FDIC’s guarantee. Mr. Money advocates taking risks in order to get great returns, but first we must have a safety net and an online savings account is a great way to build that net.
Personally, I’ve used HSBC Direct and ING Direct and have had nothing but pleasant experiences so far. Even if you’re only able to put away a few dollars at first, eventually the savings will build and snowball and by then you’ll be encouraged to put as much money as possible into the savings account since you’ll actually see real results quickly. Sure, there are higher yield investments out there but considering that these savings accounts are FDIC insured and that the interest is guaranteed, it’s quite difficult to beat these accounts as a no hassle way to passive income. Here’s a run-down of three quality online savings account:
- HSBC Direct
- Branches in some states.
- Refunds 100% of other banks’ ATM fees.
- no minimum balance
- $1 to start
- No fees
- ING Direct
- No physical branches
- $1 to start
- no minimum balance
- No fees
- FNBO Direct
- No fees
- $1 to start
- no minimum balance
- Branches in some states.
Any of those banks would make a fine choice for an online savings account. They all offer a similar savings rate with no fees and no minimum balance. Personally, I’m a big fan of HSBC Direct and their policy of refunding all ATM fees. The important thing is that you open an account now and start savings. If the economic news of the past month has taught us anything it’s that savings accounts are important to individuals and our economy as a whole. Living credit card to credit card is no way to live and I urge all my readers to save, even if it’s only a few dollars a month. Your future self will thank you!
4 Comments, Comment or Ping
Justin Wright
Using online bank accounts is surely an easy way to save money. Especially when you start one that isn’t linked to a debit card so it’s harder to get money out.
Awhile back I used to keep a lot of money in my PayPal account since I signed up for the money market fund. It was somewhere around 5.5% return which was much better than I could find anywhere else with no minimums.
Only problem with it is the fact that it isn’t insured by the FDIC.
Justin Wright´s last blog post..An Interview With Tim Ferriss
Oct 23rd, 2008
Mr. Money
Back towards the start of this year, many of the banks listed above were offering CD’s with rates around 6%…wish I got in then but alas, hindsight is always 20/20. At least my HSBC direct account is still pulling a 3% rate, which is not bad and much better than most savings accounts.
The paypal money market, as most money markets is a decent way to save but the lack of an FDIC guarantee keeps me away from them. I figure if I’m going to take a risk with my money I may as well invest it in something a bit more risky with a higher chance of a higher pay-out. To me 5.5% is just not high enough of a rate to risk losing everything!
Oct 23rd, 2008
Myla Rae Brueske
i would like to open an online savings account with a debit card. Thank you.
Jan 5th, 2009
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