Walking into a bank to make a deposit is so 1990. In fact, as the Motley Fool reports, one major bank's "free" checking account will actually charge customers $8.95 a month if they want to visit a branch for everyday transactions. Al Gore was onto something; the Internet is the wave of the future. And the future is now. If you're not stashing money in an online savings account, get with the program before people start doubting your financial savvy.
Find an online savings account with terms that work for you. Myriad information exists online. MoneyAisle.com, for example, helps you find the best savings interest rates. Pay attention to minimum investment amounts and fee structures as well. While some online institutions offer truly "no fee" products, others levy charges just like the brick-and-mortar banks.
Decide if you want to go online 100 percent or stick with a bank with both an online and physical presence. If you feel a sense of security knowing you can walk into a branch, then open an account with a firm, usually one of the major banks, that gives you the option of managing your savings entirely online, at an ATM or in person with a teller. Wholly online banks typically offer little more than electronic and limited snail-mail correspondence.
Follow the prompts at the website for the bank you choose for opening your account. Even though it's online savings, the application process is basically the same as it is for an offline savings account. You'll provide your contact information, Social Security number and a way to verify your identity, usually a driver's license number.
Set up a link between your traditional checking account and your new online savings account. Generally, this is how you fund an online savings account. Sure, you can mail your deposits in, but, again, think 1990. The firm you open your account with will provide online instructions, but typically you just provide your checking account number and the routing number for the bank you do your checking with, and your new online savings partner does the rest.
Fund your account. Depending on the institution and product you might need to open your account with a minimum deposit. Some online savings accounts require no initial minimum. Read the fine and not-so-fine print.
Execute periodic transactions when you have cash to save. You can generally go online and deposit money from your linked account to your online savings account. Funds typically take a couple of business days to clear. If your checking and savings are with the same firm, the transfer often occurs instantaneously. Virtually all online savings accounts allow for automatic deposits. You set up a schedule -- weekly, bi-weekly, monthly -- and the bank sends money from your linked account to your online savings account on a regular basis.
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