Online savings accounts have become ubiquitous with the explosion of internet banking. Often offering a far better interest rate than traditional savings accounts, they also offer unprecedented easy access to your savings.
Your Current Account
Most mainstream banks will offer online savings accounts to link to your current account, and it would be advisable to use it if you have any sorts of savings at all. Whilst money is in your current account you are earning very little interest on it. Having an online saver linked to your current account means you can easily transfer money into the saver with just a couple of clicks.
As long as you keep logging in, you can keep the majority of your money in your high interest online saver and only transfer to your current account when you need to, therefore making your money work as hard as it can for as long as it can.
The absolute best rates, as with any financial product, are from online only banks. The reason online savers (from high street or online banks) can offer such good interest rates is because they don’t require any overheads. No staff are required to take your deposits or advise you on anything, and no space is needed to store cash.
This is doubly true for online banks who can drastically reduced overheads across the board. Not maintaining large buildings with cash vaults makes an enormous difference to a business’ outgoings, and this saving is passed on to you.
Although the most convenient use of online savings accounts is to have it linked to your current account with a traditional bank, the highest interest payments will be had from opening a new account with an online only bank. What you sacrifice in convenience you will make up for in interest.