Do you have a little money you want to put into a savings account? Perhaps you are a little worried about having instant access to that money, but you do not want to be charged penalties for accessing the funds? Unfortunately for the human race when we have instant access to something we can forget about our longer term goals and go for a short term goal. In other words, when we can access our money with ease we think nothing of taking a few pounds here and there out of the account to use for something special. When we do this we eventually have buyer’s remorse or regrets when something bigger comes along. For example we may think that the money will be returned in the next month when we get paid again, but suddenly something happens like an appliance breaks down and we have to spend the replacement money. The fact is that when money has been spent it is gone and you have to work harder to replace it.
If you are the type to worry about having instant access to savings, you might want to consider internet savings accounts. These savings accounts have instant access in that you are not penalised for taking money out of the account. The downside is that it can take a few days or up to a week to get the cheque from the account into your hands. This is because most internet banks do not have local branches where you are able to go to an ATM and withdraw the money without fees.
This is not to say you don’t have other means of accessing the money. You could use an ATM card attached to the account if there is one. You may also be able to do a money transfer online to your checking account, but generally there are fees for this too. If you want to avoid the fees it definitely takes a few days for the cheque to arrive in the mail. This can be a good thing if you do not have an emergency situation where you need the funds yesterday. It makes you pause and think about whether you can wait for several days for the check and thus whether you can wait to get paid again. Additionally, it helps you consider whether you need what you were about to buy. If it is something like a manicure, DVD, or new TV perhaps you might reconsider the purchase and allow your savings to grow. If it is a car repair or a home appliance replacement chances are you will go through with the sale.
Internet savings accounts have been popular in the last several years due to the higher interest rates they offer. Internet banks have low overhead thus they are able to pay a little more in interest to you. It means you accrue a little more money quicker than an instant access savings account, but maybe not as much as a five year long term account.
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