Open an Online Savings Account (A Newbie's Guide)
By: Stanley McMahon | Posted: 31st May 2006
The basic steps for opening an online savings account 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.
Opening an account with an online bank is a quick process that can be carried out telephonically or online. 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.
Stanley McMahon recommends you visit OSAWatch for a more in-depth tutorial on how to open an online savings account.
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Tags: time consuming, bricks and mortar, checking account, overheads, atm card, fifteen minutes, savings account, fdic, postal mail, different services, eight days, residential address, address details, federal deposit insurance