Big families know big money is made in small batches since we make every penny we can save work for us to the maximum advantage. One easy way to increase passive income is often overlooked. Online savings accounts offer a few advantages over traditional accounts that we can take advantage of to squeeze just a bit more out of every penny:
High APY: Some Accounts actually have 1.05 - 1.55% annual percentage yield or higher. Compare that with the traditional .01%.
Some accounts will give you money upon opening an account.
Some accounts will give you a debit card to the account.
Easy management through mobile apps.
Typically have lower fees or completely skip some fees such as annual fee, minimum balance, monthly fee.
Unless you get a debit card, your money is a bit less accessible giving you extra time to decide if the situation is a want or need.
Of course, there are drawbacks.
If you get paid in cash, have frequent deposits or withdrawals, it may be easier to save at a local bank or credit union that has plentiful ATMs.
Customer service has been reported to be subpar at some online banks so do your research. Please leave a comment if you’d like me to review online banks.
No local branches mean all deposits must be made from another account or via direct deposit.
Transfer times can be slow. Three to 5 days is a normal time range.
Lastly, if you do choose an online bank for your savings, make sure the institution is FDIC Insured. Check to see if it is connected to a brick and mortar business, and read reviews of its customer service to insure you find a quality institution.