Savings Account Online Arizona

With so many banks and other financial institutions opening websites, more people are getting into the habit of opening bank accounts of all types online instead of going into the buildings where they are housed. The Internet makes savings account online access fast, efficient, easy and safe. This practice allows customers to choose from a great many more sources, since they don’t have to be concerned about the location. Being able to open a savings account online gives one the opportunity to open an account anywhere in the world, though some institutions may have restrictions concerning the location of their customers. This means, in simple terms, that in most cases a U.S. resident will not be able to open a savings account at a U.K. based bank. Whether this holds true of all online banking centers remains unclear, but it is something you will need to research when you choose a bank where you wish to open a savings account.

Savings accounts are only one of the many types of accounts that you can open online, but they are probably the most popular. Savings accounts online are easier to maintain than savings accounts established at a physical bank—making deposits is easy and convenient and tracking the account is easy via the web. It was probably the inception of online banking centers such as ING Direct that inspired other banking institutions to offer customers the option of opening an account online. Since that time, even worldwide giant Bank of America allows customers to open an account online and forward funds later either through the mail or by visiting a branch in the city where they live. After all, with the rush to conduct so much business online, a bank needs to join with the flow of the others in order to stay competitive. Customers want to do their banking online today, and that includes opening new accounts. The fast-paced lifestyles of the 21st century require more options in banking, such as online access to accounts and the ability to transfer funds between accounts.

The most popular savings account, at least for the average banking customer, is the statement savings account – formerly known as passbook savings at many institutions. This account requires a minimal balance, sometimes as low as $25, depending on the individual bank where you open the account. That doesn’t necessarily mean that you can’t maintain an account with a lower balance. However, if you do, one of two things will happen (and perhaps a combination of both): the bank will not pay you interest on your funds, and/or they may charge you a monthly maintenance fee for the account during each month that it is below the minimum balance requirement.

In spite of the minimum balance requirements, in most cases there are exceptions to this rule: student accounts, senior accounts, and accounts that fall under the Uniform Gift to Minors Act within each state. Another exception is an account for an employee of the bank, but these accounts usually require the employee to open the account through their Human Resources Department, though you can sign up for online access to make transfers between accounts. Before signing up for a savings account online it would prove beneficial for the individual if they review the various options and exceptions associated with such accounts: understanding how savings account online offers work ensures that the individual gets the most out of their invested and saved money.

Statement savings (or regular savings accounts) have the lowest rate of interest, and banks pay the lowest interest on these accounts, with savings and loans paying a higher interest rate. Credit unions tend to pay a higher rate than either banks or credit unions on the regular share account, which is the credit union account comparable to the statement savings account. Many people may be more familiar with this account, as it relates to an interest checking at the bank, because the credit union pays dividends on both the share account (savings) and share draft account (checking).

In addition to a statement savings account, financial institutions offer Certificates of Deposit (CDs). This monetary instrument pays a higher rate of interest than the statement savings account, has a higher minimum balance requirement, and must be kept on deposit for a specified number of months in order to avoid a penalty for early withdrawal. The interest rates vary on Certificates of Deposit and are contingent upon the face value and term of the CD. The lowest appears to be $500, however, in most cases, the lower the face value, the longer the term of the deposit. In many cases, one can find a $10,000 CD with only a three to six month term, but a $500 CD tends to have a term varying from twelve to thirty-six months. The reason for the difference is perhaps in the fact that it takes more time to obtain a return on the investment of a $500 Certificate of Deposit than it does on a $10,000 Certificate of Deposit, thus, your funds must remain on deposit longer for the $500 than the $10,000.

In the event that you need to withdraw the funds you have on your Certificate of Deposit, you must be aware there is a penalty for early withdrawal. The penalty is not just a reduced interest rate, but there is also a fee involved to process the withdrawal. To avoid paying a penalty for early withdrawal, you might want to consider keeping enough money in a statement savings account to cover any emergencies that might require additional funds. It is always advisable that an individual have a nest egg for any emergencies and a savings account online can serve as one’s nest egg. It may mean waiting a little longer to purchase a Certificate of Deposit, but you avoid a penalty by making a withdrawal from your savings account instead of cashing in your Certificate of Deposit before its expiration date.

Waddell & Reed

602-330-9958
13434 N. 12th Place
Phoenix, AZ
www.waddell.com