Thursday, August 28, 2008

Online Savings Accounts - selecting the best

Online savings accounts often appear to give you a more value - in other words a much higher interest rate, over 6% in some cases. Better still, there are often no fees, or very low fees. You can also access your money whenever you want.

The thing to watch out for is the fine print. You may be fine with placing your savings in an account like this and never - or rarely - withdrawing it. But an emergency could crop up and you need to access some of your savings. Then you find that not only is there a high transaction fee, but you've blown your interest on the balance for the rest of that month.

One month of no interest may not seem like much to worry about. However, it actually puts you further behind than you would be if you had an saving account with slightly lower interest rates and no transaction fees. Another possible problem could be that your single transaction may put your balance below the minimum required to keep your high interest. So not only have you blown your high interest for the month, but your account has reverted to low interest until such times as you can get that balance back up.

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