Internet searches and reviews are fine to start, but you’ll also want to look into these important factors:
Make sure you’re protected:
Banks that are a Member FDIC offer insurance coverage for savings accounts (up to $250,000 per depositor) through the Federal Deposit Insurance Corporation (FDIC). In other words, if anything were to happen to the bank, your funds would still be safe and secure.
Consider the APY:
One thing many people don’t realize is that a savings account is not just a place to put your money for safekeeping; it’s also an opportunity to grow your money. Online banks tend to offer more competitive earning rates, called APYs (annual percentage yields). PurePoint, for example, consistently offers a rate which is more than 20 times the national savings average. Wherever you choose to save, earning with a higher rate is a key way to stay ahead of inflation and preserve the value of your nest egg.
To compare rates and estimated earnings, check out the PurePoint calculator tool.
An online savings account can provide you 24/7 access to your funds with the touch of a button, which can mean greater flexibility. Look to see which options you have to fund your account (transfers, mobile deposits, etc.) before you enroll, so you can plan your initial deposit. Think you might be tempted to dip into your savings from time to time? Opening an account that isn’t linked to your regular checking account can help you avoid that temptation, and ultimately save more in the long run.
Read the fine print:
Some banks charge monthly account fees that can eat away at your balance over time. Make sure you understand each bank’s product features before you sign up.