Are There Reasons to NOT Open an Online Savings Account?

12.03.06 | Online Savings Accounts | 1 Comment | by junger

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On a recent digg submission of the 10 Reasons to Open an Online Savings Account (via the Online Savings Forum), the following statement was made:

Someone please post a "10 reasons to not open an online savings account" article.

Really?

Knowing what I do about online savings accounts and the comparable brick-and-mortar options, I couldn't see a single reason why someone would decline to open an online account in favor of a lower-yielding in-house account.

But here are some arguments put forward for just that case, thanks to Woknblues.

1. my current savings account is available online
2. my balances are low enough to really not make a difference as far as interest income is concerned
3. your average listed for brink and mortar interest rates are lower than what I have seen at BofA, for example.
4. You currently have a Bank that you can stick a thing called a credit card into a box and get out local currency, rather than try to connect online in an internet cafe in Manila, where everyone thinks you are "rich"
5. The idea of transferring money from a savings account to your other bank account for withdrawal seems like a huge waste of effort and time and as the axiom goes, time is money.

While you have to applaud someone for making the effort to argue against the reaso ings, all of these miss the point.

It's not the fact that it's available online that is attractive — it's the fact that because it is online, the interest rates are higher. It's not that Bank of America has a higher rate than the average brick and mortar, it's that their rate is still way lower than the highest online.

I don't see the reasoning behind NOT opening and online savings account … unless it's just out of laziness.

Am I wrong?

Join in the discussion at Online Savings Forum.

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