FIMBANK

A Global Force in
Trade Finance

Online savings accounts generate higher interest - Jan 2012

High-yield savings accounts are the ideal way to park money you may need within a year or just a few months’ time. Web-based banks operating online savings accounts can offer higher interest than any brick and mortar institution on savings products. And the principal reason the former can offer such higher rates is the fact that they are not burdened with a network of branches which are very expensive to run.

A little effort yields big benefits

You may not be comfortable severing your relationship with your existing traditional bank. If you have existing loans, lines of credit or cards it probably is not a smart move to switch banks, be it to another traditional bank or an online bank.

However, with little effort you can still take advantage of the superior interest rates offered by online savings accounts. These innovative solutions allow you to move money between traditional and online accounts and from online back to traditional sources.

If you are running high balances in your traditional current account, why not park your money in an online savings account? There are usually no minimum, or at the most, very low minimum balance requirements, and the funds can be quickly transferred back to your current account on demand.

What about bank charges?

The EU Payment Services Directive (PSD), which came into force on the 1st November 2009, established a modern and comprehensive set of rules applicable to all payment services and which applies to payments within the EEA (European Economic Area) in Euro and other EEA currencies. The directive applies to all payments except paper-based payment instruments such as cheques and bankers’ drafts. The Central Bank of Malta, as the competent authority, together with the Malta Financial Services Authority (MFSA), have transposed the PSD into local legislation.

It is important to highlight that for credit transfers the use of an International Bank Account Number (IBAN) and Bank Identifier Code (BIC) are obligatory. Do have a look at your traditional bank’s tariff of charges and use the IBAN plus BIC in order to avoid incurring more charges when performing local bank to bank and even cross-border transfers.

High Interest and service quality

Apart from a high interest rate, internet-based savings products typically offer a superior customer service. When evaluating customer service, there are two important factors to consider. The best banks offer a secure, reliable and user-friendly website and the support of a helpdesk service. Although customers should only have to deal with a bank representative infrequently (if at all), such customer service officers should be knowledgeable, helpful, and naturally, available.

Does it make sense?

Nobody can argue with the fact that online banks offer higher interest rates than traditional banks. A quick search for current rates will confirm that claim. With economic times being what they are, does it not make sense to squeeze out every penny of interest that you can from your savings?

Your next challenge is to find an online bank that fits your needs. As is the case with traditional banks, not all online banks are the same. Do your homework and find a product that satisfies your requirements and then start putting your money to work. There has been no better time than now to explore the opportunities that online savings accounts have to offer.

FIMBank p.l.c. are the operators of Easisave, a secure online savings account that offers a leading interest rate on online savings accounts. Easisave is ideal for those considering a savings account to serve as their personal or family emergency fund since these funds are not tied for a fixed term. Furthermore, Easisave customers benefit from a high interest on their savings with 24/7 access to their money. For further information please call +356 21322102 or visit www.easisave.com.