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Reasons Why People Are Converting to Online Savings Accounts


Now that the internet is easy to access, people are starting to switch to savings accounts that are done online. Having access to your bank through the internet makes it easy for yourself and your employers. One of the greatest benefits about having online savings accounts is that your company can send you your pay check without you even having to leave your house, as this can be done through direct deposit. 

Almost every company now has direct deposit which gives you more of a reason to switch over. Now you don’t have to go to your job, pick up your check then deposit it at your bank. You will be able to pay all your bills with ease. You don’t have to worry about sending in your bills through the mail and getting late fees. Banks are offering online bank accounts with better APY than it would be if you opened up an account at your local branch.

One of the bigger reasons why people are switching is because the banks are offering good interest. MagnifyMoney1 has stated that AMEX and Ally have a promotion that is offering up to 1.75% APY. They have also reported that HSBC and PurePoint Financial are offering 1.80% and 1.90% APY which is a great deal to jump on. There are many companies that are willing to accept a low amount to open an account with them, here are the many reasons why millions are switching.

The Benefits for Using an Online Savings Account

There have been a number people liking online savings accounts over your common bank because they help you build up the money in your savings. These banks are much smaller and have the time to work on customer service and help you invest your money right. Banks like Wells Fargo do offer an online service for saving accounts but they don’t compared to the companies that only work online. The technology that is offered with a bank that is only online will surpass bigger companies. Almost every anyone can access your online savings account anywhere, with the use of a cell phone or internet access.

If you find that you need to send a payment at a time that a bank is closed, you don’t have to worry about it if you have an online savings account. These banks have a 24/7 access to your account and customer service, which means you can send a payment or transfer funds at any time of the day. Online banks are backed by the FDIC which means that they will protect $250,000 for deposits that are made on your account. Having an online bank is great for people that are always in a hurry or don’t have time for making a stop at the bank. You are able to do everything you need through the internet that you would at a traditional bank.

Why Millions Are Switching

Although traditional banks offer some promotions for opening up a savings account, the online banks specials and promotions far outdo traditional banks. According to ValuePenguin, they state that online savings accounts are more willing to offer more than 1.2% in interest rates while the traditional bank savings account is averaging at just 0.06%, some even reach a low as 0.01%.2 

The significant difference between the two should have your wanted to switch over to an online savings account. The money that you would gain from just switching would have an impact on your invested money right away. If you were to put $5,000 into an online saving account with a 1.2% then after a year you would get $60. But if you were to put $5,000 into a common bank that offers you 0.01%, you would get 5 cents every year. This is a big reason why millions of people are switching to online banks more convenient and more money.

Another reason why people are disliking the common banks is that they always charge more money for certain fees that occur. Most of these banks charge a monthly or yearly fee for just having a savings account with them and some even will charge you if your money dips below the required amount. With most online savings accounts you will not have a charge fee or it will be significantly lower than your traditional banks. 

They also will offer a savings account to be opened with a low payment and no charges for monthly or yearly service. There are many bank companies that are out there, that offer many specials and promotions for just opening an account with them. So when searching keep in mind that there are many features and benefits from just opening an account online instead of your common bank.

Where to Look to Find the Greatest Online Banks

Switching to an online savings account not only saves you a lot of time but will help you out financially in the long run. With the many options and promotions that online banks offer you should be able and willing to switch over now. Why wouldn’t anyone want to make more money by switching your money over to an online bank? 

The benefits are endless and you will be able to end up with more cash. People if you are looking to switch to an online savings account now is the perfect time to do so, it doesn’t take that much time to search around and find a bank to help you with your needs. Remember that there are many promotions that offer different APY, so keep your eyes peeled for the best one out there.

If you want more cash in your pocket start searching now for the best online savings account out there.




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Kelsey Harris

Associate Writer

Kelsey joined the Wavez staff in June 2019 and has been impressing readers ever since. She graduated from USC with a bachelor's degree in English and specializes in our Health and Finance categories.