We refer to online banks as being banks that only do business online through a website. Ever since online banking was created, many people have been switching their savings at their local banks to online savings accounts. For some people having an online savings is more convenient, and can offer some benefits that regular brick and mortar banks cannot compete with. Let us take a look at why online savings accounts are gaining popularity and why online banks are just as safe as regular banks.

Benefits of Saving Online

Online savings accounts are popular with many people because of the simple fact that they give customers a little more control over their finances. When you open an online savings account everything is done online. By logging into your online account you will be able to manage every aspect of your savings. Many of these online banks have a computer system that allows you to give them permission to grab your computer's IP address; this means that every time you log on to the website from your personal computer it will recognize that it is the computer that you registered with them. This is something that most regular banks do not have on their websites and it adds another level of security to your account.

Another benefit that many online banks offer is free bill pay as well. Many regular banks sometimes charge a monthly fee for bill pay, as it is sometimes considered to be an extra service. With online bill pay you can set up payments and not have to worry about being charged a monthly fee for it. Furthermore, perhaps the biggest benefit of having an online savings is the amount of interest you can earn on your money. This is definitely the most attractive benefit of having a savings account online. As opposed to regular banks, online banks do not have to pay for the upkeep of buildings and property expenses; this allows them to offer interest rates on savings accounts significantly higher than those at regular banks. For example, banks such as Wells Fargo and Bank of America offer only.05% APY, whereas online accounts can offer up to 8 times as much or more. For example the online savings bank Ally offers a 1.00% APY return on the amount you have in a savings account with them. This may not seem like much, but when you compare it to a.05% APY, where would you rather have your money?

Just like regular banks online banks are FDIC insured up to $250,000. In some cases, for example if you have more money that you want to save, you can even set up a special savings account with your online bank and be protected up to as much as $1 Million or more with some online banks. Online accounts can be very beneficial for the person who wants to save a little more. If you plan on opening an online savings, you can rest assured that it is just as safe as a regular bank.