How much do you keep in an Online Bank?
More and more people are turning to online banks, such as HSBC, when opening a savings account. Online savings accounts often times offer a higher interest rate than those of local branches. That being said, you need to make a decision on how much money you are going to keep in your online bank. Obviously, there are many details that will go into making this decision.
Before you do anything make sure the bank is FDIC insured. This way you don’t have to worry about losing money if the bank goes under; which is becoming increasingly more common in today’s day and age.
How can you transfer money to and from your account, and how long will this take? Most people use an online savings account to save. In other words, they don’t use this type of account to pay bills. This is due in large part to how long it can take for funds to be transferred from one account to the next.
There is nothing wrong with saving a lot of money in an account with an online bank. But as noted above, you want to make sure that you don’t go over the FDIC limit. Right now, the limit is $250,000, but this is set to drop back to $100k at the end of 2009.
Thanks to above average interest rates keeping your money in a savings account at an online bank is a great idea. Just make sure you know the pros and cons, as well as why you are using this type of account, before you get started.
This entry was posted on Monday, November 24th, 2008 at 4:43 am and is filed under Banks and Banking. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
