The majority of current accounts and savings accounts can be accessed online in today’s world of technology however there are also accounts that are run entirely online and it is these that will now be explained.

Most online accounts are savings accounts however there are a few current accounts that are classed as online accounts as well. One such account is with Smile Internet Bank and for more information you should visit their website. The remainder of this article will focus on online savings accounts though.

Saving online

Savings accounts that are managed through the internet are commonly known as e-savings accounts. They are very similar in features to regular savings accounts with one big difference – they can only be accessed and managed online so going into a high street bank to make changes or withdraw money will result in a lot of blank faces from the cashiers.

This means that holders of e-savings accounts have to register for online banking but this is no hardship, especially if you have a current account with the same bank you have the e-savings account with.

Opening an e-savings Account

All e-savings accounts are understandably applied for online and if you hold a current account with the same bank as you’re opening your savings account with then the new account is often opened straight away. If it’s a new bank you’re applying to though then it can take up to three weeks for the account to be up and running. This is mainly because the issuing bank will want to confirm your identity and this is done via snail mail.

The Benefits of Online Saving

Most e-savings accounts have a higher rate of interest than regular savings accounts. This is an initiative that banks use to entice you into banking over the internet as it costs them less to run your account that way. You also still get all the benefits of a regular account, such as interest paid monthly or annually, the ability to set up regular transfers from a current account and the occasional bonus and so using an e-savings account doesn’t mean you miss out on these.

The Drawbacks

The only real drawback of an e-savings account is that you can only manage your money through online banking. This means that if you suddenly need to withdraw cash from your account you have to perform an online transfer to a current account and then draw it from there. Obviously this is a little long winded but hopefully there won’t be many emergencies that require you to use your savings.

Quick Summary

Online bank accounts are a great way to save as you can’t withdraw money from a high street branch of your bank but conversely this can also be seen as a down point. If you are likely to need access to your money then an e-savings account probably isn’t the best option but if you aren’t going to need instant access then these types of accounts can offer better rates of interest a lot of the time.