Function

• Many traditional and online banks offer savings accounts to provide individuals with a tool to save money. Money in the account earns interest at a rate determined by the bank. Typically, it's not easy to access the money in online savings accounts since you can't just walk into the bank or visit an ATM, making them a good option for savers.
  
  

Benefits

• One of the primary benefits of putting money into an online savings account is that it usually has a higher interest rate than you would get at a traditional bank. These banks do not have to invest a great deal of money in branches and other overhead like traditional banks. While the rates will not be as high as what you could make from investing, this is a safe way to earn a decent return on your money.
  
  

Features

• Most online banks also make it a priority to limit the amount of fees charged to customers. Online banks compete against traditional banks and many try to have as few fees as possible. You may not have to worry about account minimums or withdrawal and transfer fees that are commonplace with many financial institutions. This will allow you to keep more of your money.
  
  

Considerations

• One of the big disadvantages of online savings accounts is that you have limited options when it comes to deposits and withdrawals. If you want to put money in your account, you will have to mail a check or electronically transfer it from another bank account. Some online banks also put a limit on the number of transactions you can do monthly. When you mail a check, you will have to wait several days before the money makes it into your account.
  
  

Warning

• When choosing an online bank, there are precautions you should take. Never divulge your user name and password, as someone could potentially transfer your money out of the account. While many online banks take painstaking efforts to ensure that this does not happen, it is still possible. Also make sure the bank you choose is legitimate by checking with the FDIC.