An online savings account is a savings account that all banking and transactions are done online. Online savings accounts have higher savings rates and lower fees compared to a regular brick and mortar savings account issued by a traditional bank.
When you open an online savings account check for the best savings rates, you fill out a form online and submit it. Sometimes you can either open a savings account online or print and mail the form to the bank. Online savings accounts are also called high yield savings accounts. Some banks offer a very small minimum opening deposit of $1.00.
Banks make opening an account very easy, banks also allow you to link other bank accounts, both internal and external to the online account. They do this so transferring money between accounts is also very easy. Some banks will also give you an ATM card to access your funds, some will also reimburse a set amount of ATM transactions costs every month. Usually with a maximum of $25 reimbursement for ATMs.
ING Bank practically invented the online savings account with their Orange Savings Account. Practically every major national bank has a high yield online savings account. Some banks also operate only online, Bank of Internet is one of them. Search around for the best high yield account online, there are tons of websites that list competitive rates so you don’t have to go to each individual bank’s website to find the highest rate.