Should I Choose Online Savings Accounts with an Online Bank?

Most banks now offer online banking services alongside the standard services that they continue to offer at their brick-and-mortar locations: checking, savings, credit cards, loans, etc. If you're already planning to transfer your savings account, you may be wondering if you should stick with a bank that you can still visit in person, or switch to one that focuses exclusively on Web interaction because it's a 100% online bank. Here are a few points to consider when choosing between an online savings account and a savings account with an online bank:

Online banks traditionally offer the same services as their offline counterparts, but stationary banks add the benefit of in-person accessibility. If it's your preference or simply more convenient for you, you can stop by local branches of your offline bank as needed to speak with financial advisors in person, complete deposits and withdrawals or otherwise manage your money. And then anything you still wish to accomplish from your home or office computer, like checking the balance of your online savings accounts, is readily available as well - instead of only available in that format, with access to advisors limited to online chats and telephone calls.

Compare banks thoroughly before choosing one. Online banks may offer better deals and rates for their online savings accounts; but be wary of any numbers that seem too good to be true. In some cases, it makes sense that you get better rates from online banks because they have less overhead cost than does a company that's tasked with running site-specific branches. And those savings can - and should - translate to those who use the bank. But you should still be able to get a sense of what's reasonable by looking at many banks' offers, and anything too far off the chart should be closely scrutinized. Additionally, if you get a great rate from an online-only bank but still would prefer to use one that also has some in-person locations, you can bring the numbers to the second option and see if they'll reduce their fees or raise their rates to match their competitor and secure you as a member.

Check any prospective bank's standing with the Federal Deposit Insurance Corporation (FDIC). This unit examines financial institutions to ensure that they meet a set of standards and qualifications before it approves them. If a bank is insured by the FDIC, it means that it's reputable - and regardless of its standing as a business entity, your online savings accounts with it are always protected by the government and will be replaced as guaranteed by that bank.

TM Murphy is a professional writer who lives in NYC. She currently specializes in fashion, beauty, marketing and finance articles. For easy-to-understand financial advice on opening a savings account with an online bank, she often turns to http://www.discoverbank.com. TM Murphy has been writing full-time since 2006, when she graduated with a B.A. in English from Northeastern University.

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