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Save money by creating an online savings account

Saving money is no easy task, especially given the current economic climate. With the cost of everything from food to gas skyrocketing and wages stagnating, saving money is extremely difficult for so many right now. One of the best personal finance strategies you can adopt is to pay yourself first even if it is just a small amount. Make it a goal to set aside 10 percent of each paycheck into an online savings account. The primary benefit of putting your money into an online savings account is that online banks can offer higher interest rates than traditional brick-and-mortar banks. Online banks have less overhead than brick-and-mortar banks and as a result, they can offer higher interest rates and eliminate monthly maintenance fee requirements that so many traditional banks have. According to PRWeb, brick-and-mortar banks offered an average interest rate of 0.158 percent on savings accounts during the fourth-quarter of 2011.
Key benefits associated with putting aside money in an online savings account: 
Access barrier is created It generally takes 3-5 business days to transfer money from your online savings to your traditional brick-and-mortar checking account. This is an important access barrier that forces you to plan ahead and one that really prevents you from splurging on unnecessary items. If you have a checking and savings account at a brick-and-mortar bank, you already know just how easy it is to make the transfer from savings to checking. This access barrier will help you save more of your hard earned money. This is probably the most important benefit of opening an online savings account.
Enjoy 24/7 access Online savings accounts can be accessed anytime and anywhere in the world as long as you have a computer and Internet access. The online banks that were listed here also have excellent customer service in case you need to discuss any matters or issues.
Cheap and convenient As mentioned, online banks have less overhead and so they can offer savings accounts without any attached monthly maintenance fees. It is also extremely easy to open an online savings account and link it to your traditional checking account. The entire process should only take a few minutes and you can easily make a transfer from your brick-and-mortar checking account to your new online savings account.
If you are currently setting aside money in a brick-and-mortar savings account, you would be better served to make the switch to an online savings account. Not only do online savings accounts offer higher interest rates, these accounts create an important and necessary barrier to your money so that you avoid splurging on occasion. These accounts generally have very low, if any, monthly maintenance fees and are highly convenient in terms of accessibility. The online banks discussed here are also FDIC insured so you can be assured that your money is safe. You may want to ask your employer if a portion of your salary can be direct deposited to your savings account. This money can then be out of sight, out of mind.
Amber Lewis is a financial adviser and web content coordinator. She recommends setting money aside in an online savings account mainly because of the access barrier that is created.


john @WickedFrugal said...

This is a really great tip and something that I have been doing for a couple of years now. I have one debit card associated with the savings account and I do not keep the card in my wallet. I only use the card for planned spending, such as christmas/birthdays et-cetera.

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