Online Savings Account

Online savings accounts are focused on offering amongst the highest interest savings rates available with a low touch service approach with on line saving customers managing their accounts by logging into a secure on line banking site. It is common for these on line savings account to offer no cheque, debit card or branch services, with account holders directed online to make debits and withdrawals from their account. Most online savings accounts are required to be linked to an everyday transaction account, which can be the same bank or in some cases a different bank, to the provider of the online savings account.

How to Select the Best Online Savings Accounts

Internet Banking is used by millions of Australian's to manage their bank account, make transfers, pay bills and review statements, in the knowledge that its secure safe and saves them a heap of time. This widespread adoption of internet banking has lead to a continuous steam of innovations from the banks, all designed to enhance this online experience, and deliver a 24/7 service.

One of the most successful innovations has been the introduction of online savings accounts that provide convenient and secure access to your savings at anytime of the day or night.

One of the primary benefits, aside from the 24/7 convenience of access, these online savings accounts deliver is higher interest rates. The offering of interest rates at the higher end of the range is made possible by the fact that these online savings accounts cost the banks less to administer, and the savings made in administration are passed onto the customer, with higher interest rates.

To select the best online savings account it is important that your research balances the quest to attain the highest return on your savings with how you wish to manage your savings. The points to consider should include:

  • Access to your savings - Do you need instant access to your savings are will it be OK to commit them to no access for a fixed period, in return for a higher interest rate.
  • Revert rate - If you commit to the no access option, what is the interest rate that your savings will be reduced to if you make a withdrawal, and is this a competitive rate?
  • Bonus rates - Many high interest accounts offer bonus interest rates as an incentive for new customers, these bonus rates are added to the standard variable rate of the account to deliver a higher interest rate. Some of these bonus rates only last for an intial fixed period, after which the rate reverts to the standard variable rate, whilst some are applied to the account ongoing so long as some conditions are met, such as making a deposit of a certain amount each month. 
  • Is your loyalty rewarded? - Your current bank account provider probably offers an online savings account it is worth checking to see if they offer a preferential rate for current customers.

In summary the best on line savings account for your circumstances will be the one that will help you make the most of your money while offering you the flexibility you require.

Features of online savings accounts

  • Security - To keep your account secure each providers online account system will feature a log in process which will require you to enter two strings of data, one of these will be a password and the other possibly an account number or username. It is important that you keep these secret and that you choose a password that you can remember.
  • Linked Account - To enable you to transfer cash in and out of your online savings account you will need to link your online savings account to a transactional account. This account will sometimes have to be held with the same provider as your online savings account but it is more common an account with any provider will suffice.
  • Minimum Balance - Most online savings accounts require that a minimum balance level be maintained at all times. This condition is often waived if you choose to pay your salary into your account each month.
  • Statements - An account statement can be viewed by logging into your online savings account at any time. These statements can also be printed and sometimes saved to your computer, with no charges for accessing either current or passed statements.
  • Tax Statements - To help organize your tax paperwork all online savings account feature an ability to create and print of a tax statement of your interest earning for a specified tax period.
  • Tiered Interest Rates - Many online savings accounts offer tiered interest rates whereby the more you deposit and keep in your account, the more interest your earn.
  • Bonus/Promotional Rates - These are frequently offered with online saving accounts though they usually include conditions such as depositing a certain amount of money into your account each month to qualify for the bonus interest rate.
  • Transfer times - While making transfers from a linked account is very convenient the time for the transfer to or from your online savings account could be up to 5 days, this potentially can be minimized if your linked account is held with the same bank as your on line savings account. 
  • 24/7 Account Access - You are able to manage your savings account at a time to suit you any time day or night.