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Online banking is becoming more widespread. In June 2009, a survey by Gartner Group found that almost half of all U.S. citizens use online banking. Online savings accounts with these banks are usually more profitable and convenient.
Benefits
Online savings accounts usually offer the best interest rate of all savings accounts, especially from banks that do not have a "brick and mortar" presence. Five percent interest is not unheard from an online savings account.
Considerations
Most online savings accounts are even more beneficial to young or new investors, because they require little money to start and easily managed from any computer.
Disadvantages
Strictly online banks offer no banking services if their website experiences difficulties. Land-based bank's online account features are usually limited because banks still deal mostly with accounts opened at branch locations.
Tips
Read reviews and research any online savings account before signing up. Most online savings accounts are FDIC insured, but consumers should still avoid the hassles of a financially troubled bank. Also, make sure the account does not include a surcharge for keeping below a certain balance.
Warning
Consumers with an online account should set their password to at least eight characters. Hackers can brute force a five-digit password in 10 seconds, but eight digits can take 115 days.
Source:
DepositAccounts.com: Online Savings Accounts
Bankaholic.com: Benefits of Online Savings Accounts
AmericanBankingNews.com: Online Savings Account Guide
More Information:
MyBankTracker.com; 5 Online Banking Scams Every Consumer Should Know 5
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