For anyone, the idea of being able to make more money and secure your financial stability is appealing. People are constantly looking for side hustles to earn more money and ways to save the money they’ve already made. In the last few years, online banks and savings accounts have risen in popularity and offer a fantastic solution to traditional banking. While many people are wary of using a solely online bank and trusting their money to that entity, with research, you can find a great bank that provides better benefits than those of a brick-and-mortar financial institution.
For most people, the greatest appeal of an online bank is that you’ll have a much greater interest rate for your savings account. Since an online bank does not have to worry about the cost of maintaining physical bank locations and hiring hundreds of employees, they’re able to offer a greater interest rate for your money, some as high as 2.0%. This number is incredibly appealing when compared to the average interest rate at a traditional bank, which is around 0.04%. Many people opt to continue to use a traditional bank for their checking account, but put their savings in an online account.
Many are under the false assumption that online banks are simply not safe. However, online banks and traditional banks both have about the same amount of online security risks, since even traditional banks offer online banking. In order to make sure your money is as safe as possible, double check that the online bank you’re considering working with is FDIC insured and take security measures such as only accessing your account from secure WiFi and regularly changing your password.
While online banks usually do not provide as many options such as various types of checking and savings accounts, loans, or insurance options, there are plenty of banks you can choose from for a savings (or a basic checking) account. Online banks have to compete with one another to offer the best options, interest rates, and security, so you have plenty to choose from. Take your time to do your research and see what institution best meets your financial needs.
Another great perk is the convenience that many online banks offer. Most established online banks have agreements with ATM networks that allow users to access thousands of ATMs without paying a fee. You can also easily manage your money online and make transactions between other financial accounts.