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Electronic Savings Account
Save Online, Try The Electronic Savings Account
by Robert Thatcher
Savings account is account deposited that is only intended to stay in
the bank for a relatively shorter time span. This account usually
offers much lower interest rates than most bank accounts. But still,
like many other accounts, it accumulates interests. The rate of
which is largely dependent on the conditions provided by the bank.
Electronic savings accounts are normally maintained by commercial banks,
credit unions, loans and savings associations, and some mutual
savings bank that are offering interests that can never be used as
money. However, the account may be utilized by writing a check.
These accounts allow customers to use parts of their liquid
assets, which may be used for any transactions. But before a savings
account is used, the balances in the savings account must first be
transferred to checkable deposits or transaction deposits or
currency. But due to the simplicity of transferring the saving
accounts, they are often termed as "money".
Though the use of checks is often not allowed, withdrawals are
still easier when done using the savings accounts. The Money Market
Deposit Account or the MMDAs on the other hand may restrict you on a
limited number of transference of accounts and withdrawals.
With the advent of the Internet comes the development of a new
system of banking- the direct-to-consumer banking system. This
particularly addresses electronic savings accounts. Direct-to-consumer
system allows direct access to electronic savings accounts from the traditional
bank online where money naturally transfers by means of electronic
bank transfer. There are two types of banking institutions that
create and allow this form of transaction- online-only banks and the
traditional banks.
Online-only banking is the answer of the entrepreneurs to the
growing consensus of the general public of who usually make banking
transactions through the internet. These banks tried to accomplish
what real banks have done. They offered almost the same spectrum of
products that traditional banks have but offered them on
consumer-friendly deals- high interest rates and low fees.
Electronic savings accounts often offer significantly higher rates of
interest as compared to the contemporary savings account. This deal
may be attributed to the fact that lesser expenses during online
processing and that online market is naturally rate-sensitive.
Sadly, the majority of the consumers are not yet prepared to this
new treatment in banking. This in effect, brought down most of such
banks.
But by the end of year 2000, ING launched an optimized form of
online-only banking. This was rather successful and brought great
increase in the online banking industry. They created a much simpler
electronic savings account transaction that pays higher rates than the
traditional banking. But this does not permit the use of ATM cards,
checks, and other services. It was only intended as an account for
which your money may be safely guarded.
For almost three years, ING had no other rivals in this system of
banking. But recently, many other banking institutions have followed
suit. Some were the pioneers of the online-only banking who
eventually died down during the course yet returned to beat the
market share ING has. Some of these banks offer the same services
with that of the ING programs. Most have the same principle of high
interest rates and no unnecessary frills.
One notable new entrant is the VirtualBank. This targeted the
high-end techy society yet they offer much lower rates as compared
to the ING Bank. Thus they gained some consumers.
Eventually, the industry expanded sometime in 2003 until 2004.
And by the year 2005, electronic savings account virtually revolutionized
banking by means of online-only banking.
About the Author
Robert Thatcher is a freelance publisher based in Cupertino,
California. He publishes articles and reports in various ezines and
provides saving account resources on.
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