I can’t think of a Christmas where I’ve actually had the money for presents. I used to alternate holidays with my children’s father when the kids were younger and, as much as I LOVE Christmas, I was also anxious the closer it got to the actual day because I just didn’t have extra money when it was my year … or any year really. In retrospect, I had enough for things they likely would have loved but it wasn’t until recent years I adopted the mindset that experiences are better and to really put deep thought into whether a tangible present was something they really wanted and could use or if it was something I was getting just to have more under the tree.
2020 was actually the first year I had the money for “extras” like Christmas presents because I factored it into my budget at the start of the year and created an online savings account just for the purpose of presents. I could have gone with a brick and mortar but here’s why I didn’t.
There are higher interest rates with online savings accounts
Online accounts offer some of the highest interest rates. Without the overhead expenses associated with brick and mortar locations, they have the funds to put back into their customers through more enticing interest rates that will grow your money faster.
Last year, I discovered I had $40 sitting in an online savings account. It had grown over the years from the $1 I’d deposited to open it when my kids were younger. Clearly, I wasn’t rolling in the dough, but I had $39 more than I started with and it was an account I’d completely forgotten about.
You’ll find low to no fees when banking online
Oftentimes, when we sign up for bank accounts, it’s because we have some kind of steady money coming in. This is great … until that recurring source dries up. Without something to replace it, you’ll likely be hit with a “monthly maintenance fee” upwards of $15 a month just for holding your money there. These fees are usually, but not always, associated with most brick and mortar accounts while online bank accounts typically don’t charge them.
In another discovery from last year, I realized after being laid off, meaning no more direct deposit of a percentage of my check, I’d been getting charged $15 per month to “maintain” my lone brick and mortar account. I was 6 months deep into “maintenance” before realizing it … I also, promptly, took my money elsewhere.
Online savings accounts make it harder to access funds
Usually, people put money into a savings account with the intention of it being for emergency purposes. Due to easy access, they dip into them for things that are far from it. That morning Chick-Fil-A or Starbucks run is not an emergency just because you ran out of funds in the app, don’t have cash on you, and aren’t sure if the money will clear if you use your checking account. Putting money in an online savings account, especially when it isn’t linked to any other accounts, and doesn’t come with a debit card, means you won’t be able to access the money as easily. Usually, it takes a couple of days and by then, you’ll have realized you didn’t need whatever you were wanting anyways.
The convenience of walking into your local bank to complete your transaction can be hard to give up but the perks of an online savings account shouldn’t be overlooked. When seeking out the best savings account options for your emergency savings account, or whatever you’re saving for, remember those 3 great reasons you should invest in an online savings account to store your funds.
Have you switched to online banking or do you prefer to go into the bank to make your transactions? If you still prefer going to a brick-and-mortar, why is that? What would lead you to make that change? Please let me know in the comments and, as always, thank you for reading and getting socially acquainted with me.
