Ever thought of earning the highest amount of interest on your savings account? Then go ahead and create an online savings account. This account is required if you want to manage your money. Their management tool allows you to maximize the interest rate and to minimize the risks associated with investing in stocks, bonds, and vehicles.

An online savings account is like a traditional savings account; it is a place where you save money and earn interest. Most of the accounts are protected by the FDIC. An online savings account has many benefits over a traditional one. The main benefit is that of a high rate of interest. It can be more than 0.3% and higher than 3.0%.

Online savings accounts can give higher interest rates. A traditional bank needs to have an infrastructure, pay tellers, and other customer service personnel; an online bank account does not have these features of a standard retail bank. All transactions and customer service activities are conducted over the Internet. The online banks take advantage of the lower overhead costs to pass the savings on to the consumers in the form of higher interest rates. This attracts customers and encourages them to invest in these financial institutions.

Features of online savings accounts
There are some differences between an online savings account and offline savings account, but the main difference is a higher interest rate. Some of the other differences are mentioned below:

• Depositing: When you deposit money in an online savings account, you must deposit a small amount. There is no ATM to deposit your paycheck/teller etc. This means that you are still using a traditional check or using a completely wireless method to transfer the money.
• Transfers: Regular or wire transfers is the most popular way to top up an account. You can also transfer from online savings institution or local bank. If you start a transfer, you give the online account access to your local bank account. The online account then transfers the money from your bank account into the bank’s account. The withdrawal will show up on your bank statement; in many cases, no fees are charged for this. You can initiate the transfer from your bank to your online account. Check the local bank’s rules regarding transferring of money online.
• Withdrawals: Withdrawing money works in much the same way. Your online savings account will either let you transfer money from the account to your regular bank or send you a check for the amount of money you want to take out. There may or may not be a fee charged for these services; so it is good to check the rules with your online savings account.
• Payments: For your savings account, you do not need to check writing privileges for an online savings account. It means you cannot make bill payments from your online savings account. In most cases, you cannot make payments directly from savings accounts, since the purpose is to save money. This is the difference between your online savings account and a standard savings account.
• Customer service: Most of these accounts offer online customer service in the form of email, live chats, and helpline numbers. There is no physical location where you can go and talk to someone. You should be comfortable with the internet/online format.
• Interest rates: This is a major benefit for online accounts; make sure you get the best rate. You can go ahead and compare rates online before opening an account. Such accounts have a high minimum and the amount of money to be kept in the account on a daily basis. Check the rules before investing so that you do not get fined.
• Opening an account: Online savings accounts can be opened from the bank’s website. Many online accounts offer you an incentive to open an account or make an initial deposit. These can range from $25 to over $100 or can be a gift. Some online savings accounts also offer a referral bonus, so you get to invite friends and family to open an online account.
• Restrictions: Online savings account has many upsides like higher interest rates, etc. but there are some restrictions on transfers and withdrawals; there is a limit to the number of transfers you can make. The number of times you add and take out money is less. Money markets are the highest paying online savings accounts. Savings accounts including online savings accounts do not come with a debit or ATM card. If you want an account and need to transfer money, it will take two/three days.

Federal rules make it mandatory that only six withdrawals or transfers occur on a monthly basis. This means that you cannot put money in or take money out at will; you must comply with these regulations. Some online savings banks add their limitations and rules for getting money in or out. These rules can cover withdrawal amount limitations, amount restrictions, and how many withdrawals.

Here are a few of the most popular and best online savings accounts:

• Goldman Sachs Bank: Your deposits are FDIC insured and safe. It has the best yield so far.
• Discover Bank: The rates are the highest, if you qualify for premium level interest rates, things get better.
• FNBO Direct: An easy to use website, it is simple and has the best rate amongst the best out there.
• Ever Bank: The bank has one of the best rates out there; so it’s well worth a look since you never know how the rates will change in the future.