Open A Savings Account Online

(A Newbie's Guide)
by Stanley McMahon

The basic steps for opening an savings account online are the same for all online banks. Various online banks are present and these offer different services and benefits but to varying degrees. Before opening a virtual bank account, it is important to know if the bank is insured by the Federal Deposit Insurance Corp (FDIC), which insures accounts up to a value of $ 100,000.

The APY offered by online banks is much higher than that offered by bricks and mortar banks; this is because maintaining a virtual account results in fewer overheads for banks. All the same, one should compare APYs offered by different banks before selecting a bank to open an account with. Ideally, the banks should credit the interest, which is compounded daily, on a monthly basis.

You can open a savings account online either telephonically or online and is a quick process. Filling the application form online rarely takes more than fifteen minutes; whether filling for an individual account or a joint account. Information required includes personal details, residential address, and details of a checking account that is to be linked to the online account. If during the course of filling the application one is unable to furnish any detail, it is possible to save the application and return to it later. The linked account is verified by the bank by verifying two test deposits made into that account by the account holder. Instant verification is also possible; it is achieved by submitting the login ID and password of the checking account that needs to be verified. The account is activated when the prospective account holder receives material via postal mail. The material includes a temporary login ID and password, the account number and account password, ATM card, and ATM password. It can take anywhere between four to eight days for the materials to arrive by post separately. Sending the material via mail is time consuming but it helps the banks to corroborate the address details mentioned in the application by the prospective account holder.

About the Author
Stanley McMahon recommends you visit OSAWatch for a more in-depth tutorial on how to open an online savings account.

if you wish to open a savings account online, you should be aware that you will not have the opportunity to go to a bank branch and be serviced by a human officer. Moreover, the online bank service may be interrupted occasionally for some time either for software maintenance or because a server failure, so you can't be confident that you will always have access to your funds. But if these are small nuisances for you compared with the advantages of higher interest rate and ease of use, you may well go and open a savings account online.

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