Opening up new savings account online is an excellent way to put your money in a safe place and allow it to sit and accumulate a bit of interest. That small amount of interest, over time, will start to build up. Whether you already have a specific goal in mind (house, college, retirement, emergency fund, etc.) or want to save and earn interest, there are plenty of online banks to choose from.
The Annual Percentage Yield (APY) refers to the annual rate of return, which correlates with compounding. The compound interest refers to calculations based on both your initial principal and the interest accumulated from previous periods. The APY % itself fluctuates regularly for each bank.
Many people choose to link their checking account with the savings account and make a set amount of automatic deposits each month. However, it might not be the best strategy to open up a new savings account with your current bank if the APY% isn’t high. The terms aren’t as favorable to you as they are with other banks.
New Savings Account With Approved Withdrawals
You’ll still be allowed to make some purchases or withdrawals with money from the savings account. However, there is typically a limit to the number of transactions you can make per month without being charged a fee. Find out how each bank deals with this when viewing the website. What is the maximum number of transactions per month you’ll be allowed to make for free? Also, some online banks offer ATM access with savings accounts, and some do not.
It’s not just online banks that allow you to create a new savings account. Some good credit unions operate online and have good APY %s and other benefits. Just make sure the NCUA federally insures them.
When comparing your options, you’ll likely find various tiers, ranging from basic savings accounts that require a little to no minimum balance requirement up to a premium account that typically requires deposits in the five figures or higher. Depending on the bank, you might also be required to deposit a certain amount every month to continue getting the higher APY% and other benefits.
For the time being, one good online bank to check out is CIT Bank. They are consistent with their benefits, decent rates, fair terms, and customer service. Look into their options for a new savings account.