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Savings: Savings Accounts
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Withdrawals from a savings account are occasionally costly and are sometimes much higher and more time-consuming than the same financial transaction being performed on a demand account. However, most savings accounts do not limit withdrawals, unlike certificates of deposit. In the United States, violations of Regulation D often involve a service charge, or even a downgrade of the account to a checking account. With online accounts, the main penalty is the time required for the Automated Clearing House to transfer funds from the online account to a "brick and mortar" bank where it can be easily accessed. During the period between when funds are withdrawn from the online bank and transferred to the local bank, no interest is earned.
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Watch your savings balances grow even faster with automatic transfers from your checking account to your savings account. It's easy, convenient and automatic. Ready to start? Log into Chase OnlineSM and select "Schedule a Repeating Transfer" from the Payments & Transfers tab or visit a local branch to discuss your options.
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"Retirement accounts such as a 401(k) or an IRA help sock-away money for the future while providing valuable tax savings," says Keith Brannan, vice president of Financial Security Planning for COUNTRY Insurance & Financial Services. "If you are not taking advantage of these accounts, you could be missing an opportunity to pay less in taxes. More importantly, you could ... be missing an opportunity to use those funds to meet future retirement goals. Learning about them or talking to a professional can help you improve your financial security."
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[O]f all, there is nothing more convenient than monitoring a savings account from the comfort of one’s own bedroom at any hour of the day. So, if you have an online bank account then you are saving the time and energy that would have been consumed in traveling to the bank branch and making the transaction. So the first thing that attributes to the rising popularity of online savings accounts is the convenience that is associated in operating such an account.
With the advent of the internet, high yield savings accounts have become more prevalent from virtual banks. The internet savings account business model is to offer interest rates generally higher than those available at storefront banks while maintaining few if any retail locations and keeping customer service costs low through automated and computer systems. The growth of online high yield accounts have pushed many brick and mortar banks to create their own high yield savings accounts.
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While yields on savings accounts remain in the cellar, yields on short- term certificates of deposit have been consistently increasing since the Federal Reserve's rate-setting committee began boosting interest rates. The average three-month CD yield continues to rise and has now reached a 20-month high of 1.09 percent, according to Bankrate.com's weekly national survey.
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