ING Direct

Do you have an online high-yield savings account?  If you don’t you need one!

Let me tell you why:

1. Brick and Mortar Interest Sucks

I just checked the interest rate on my savings with the brick and mortar bank I do my checking with.
Ready?  0.20% APY!

It used to be that banks would offer a decent interest rate on savings to get you store your money with them; not quite the case anymore!

2. Many High Yield Online Savings Accounts Offer Better Interest

I use 360 Savings for my online savings.  You won’t be Bill Gates rich with their rates but it is MUCH better than what the average brick and mortar bank offers.  As your saving go up that interest starts to get well…interesting.

If you do a little research you’ll find banks with higher interest on their online savings than 360 Savings.  Let me tell you, that interest adds up!  I love seeing how much I’ve earned every month and at the end of the year.

3. Automatic Savings

Most online banks will let you set up automatic savings.  What this does is pull a set amount at whatever time you set up to be pulled into your online savings account.  This could be from your checking account or even from your paycheck if it’s direct deposit.

Why automatic savings?  So you don’t have the opportunity to spend the money first then try to save!  Even if it’s a small amount it will add up over time (and that money earns interest and so on…).

4. Bill Pay

Some online banks offer the ability to pay your bills from the site.  Another option is using your routing and account numbers to set your account up to pay from on the site you have a bill with.  For instance, we set up our car payment to pull from our online savings account.  This way we don’t have to worry about having enough in our checking to cover the bill every month (we have more than enough in our savings to cover this).

Yes, you can do this from a checking account as well but the money you need to keep there won’t be earning interest in the meantime.

5. Out of Sight, Out of Mind

In a lot of brick and mortar accounts your checking and savings are accessible from an ATM.  Falling short of funds in checking?  Pull it outta savings.  I don’t have access to my online savings at an ATM.  As a result I don’t have that money staring at me every time I need an ATM.

My savings stays saved!

6. Relatively Easy to Access

So I can’t pull my savings from an ATM.  That’s ok.  If I should ever need it then I can have my money transferred to my checking in a few days or so.  The money is still pretty easy to get should I need it but not so easy that I could take the savings for an impulse buy!

7. Use of Sub-Accounts/Multiple Accounts

With 360 Savings you can set up multiple accounts under one customer number.

Wanna save for a new car?  Create another account just for that purpose.  Wanna show your child about the power of saving and compound interest?  Set up an account for her to put gift money in.

In fact you can set up automatic savings for any account as well.  When my wife and I were engaged we set up an account to help save up for the wedding.  The options are limitless!

8. Great spot for Emergency Savings

Some might say online savings isn’t liquid enough for emergency savings.  I say it depends.  For us it’s a great place to stash emergency funds  which will also earn interest!

9. Great Customer Service

This one depends on who you use for your accounts.  Again, we have been using Capital One’s 360 Savings for their high-yield savings for years.

Every time I’ve called I’ve gotten friendly, helpful people who were able to answer my questions and handle my needs without any problems.  That’s a huge reason why we haven’t switched our account somewhere else with slightly higher rates.  Knowing that my bank can handle any issue I have without being on hold for half an hour is important to me.

That’s just nine reasons.  I’m sure there will be many more in the comments!

Click here to get started with the online savings account we’ve been using – 360 Savings.

A high-yield savings account can be a great instrument if you are serious about building up your savings.  Make sure you check the fine print for any account you plan before you sign up.  Know what fees and money limits are involved and any penalties you might incur for taking your money out.  Check online to see how well people like the bank’s service.