Money deposited in a savings account is only intended to stay in the bank for a relatively shorter time span. This account usually offers much lower interest rates than most bank accounts. But still, like many other accounts, it accumulates interests. The rate of which is largely dependent on the conditions provided by the bank.
Savings accounts are normally maintained by commercial banks, credit unions, loans and savings associations, and some mutual savings bank that are offering interests that can never be used as money. However, the account may be utilized by writing a check.
These accounts allow customers to use parts of their liquid assets, which may be used for any transactions. But before a savings account is used, the balances in the savings account must first be transferred to checkable deposits or transaction deposits or currency. But due to the simplicity of transferring the saving accounts, they are often termed as "money".
Though the use of checks is often not allowed, withdrawals are still easier when done using the savings accounts. The Money Market Deposit Account or the MMDAs on the other hand may restrict you on a limited number of transference of accounts and withdrawals.
With the advent of the Internet comes the development of a new system of banking- the direct-to-consumer banking system. This particularly addresses online savings accounts. Direct-to-consumer system allows direct access to savings accounts from the traditional bank online where money naturally transfers by means of electronic bank transfer. There are two types of banking institutions that create and allow this form of transaction- online-only banks and the traditional banks.
Online-only banking is the answer of the entrepreneurs to the growing consensus of the general public of who usually make banking transactions through the internet. These banks tried to accomplish what real banks have done. They offered almost the same spectrum of products that traditional banks have but offered them on consumer-friendly deals- high interest rates and low fees.
Online savings accounts often offer significantly higher rates of interest as compared to the contemporary savings account. This deal may be attributed to the fact that lesser expenses during online processing and that online market is naturally rate-sensitive.
Sadly, the majority of the consumers are not yet prepared to this new treatment in banking. This in effect, brought down most of such banks.
But by the end of year 2000, ING launched an optimized form of online-only banking. This was rather successful and brought great increase in the online banking industry. They created a much simpler savings account transaction that pays higher rates than the traditional banking. But this does not permit the use of ATM cards, checks, and other services. It was only intended as an account for which your money may be safely guarded.
For almost three years, ING had no other rivals in this system of banking. But recently, many other banking institutions have followed suit. Some were the pioneers of the online-only banking who eventually died down during the course yet returned to beat the market share ING has. Some of these banks offer the same services with that of the ING programs. Most have the same principle of high interest rates and no unnecessary frills.
One notable new entrant is the VirtualBank. This targeted the high-end techy society yet they offer much lower rates as compared to the ING Bank. Thus they gained some consumers.
Eventually, the industry expanded sometime in 2003 until 2004. And by the year 2005, savings account virtually revolutionized banking by means of online-only banking.
Robert Thatcher is a freelance publisher based in Cupertino, California. He publishes articles and reports in various ezines and provides savings accounts resources on http://www.your-saving-account.info.
Article Source: ezinearticles.comIt is so simple to do; it must be harmless, right? Using your credit card at an ATM works just like a debit card, right? It’s OK to use my credit card at an ATM machine because I’ll just pay off the debt later, right? If you asked those questions, you’d be wrong on all three counts.
That’s because there are lots of hidden dangers and costs when you use your credit card at an ATM, hidden dangers and costs that go a lot deeper than just the usual problems associated with building up debt and living beyond your means.
That’s because credit cards are set up to make maximum money when they are used at an ATM. They generally charge an extra fee of 2 to 4 percent on cash advances when they’re used at an ATM, and that’s on top of the usual transaction fees that the ATM’s bank will charge you. Plus, an ATM cash advance will also have an even higher interest rate on it than normal credit card purchases. So if you happen to let an ATM cash advance stay on your bill longer than the grace period, you’ll see steep interest payments the following month.
Grace period? Did we say grace period? In many cases, ATM cash advances have no grace period at all. That means that that interest starts to build up as soon as they money leaves the ATM machine and enters your pocket. And that interest grows every minute, every hour, and every day until you pay it off.
And speaking of paying it off, the credit card company may make it actually difficult to pay it off right away. That’s because some credit card companies have their systems designed to funnel your payments first to regular purchases. Then when you pay those off, and only when you pay those completely off, your payments go to paying off ATM cash advances.
How can credit cards get away with this, you ask? It’s like highway robbery. It kind of is. The only problem is that credit cards are private businesses, so they can set the terms of their business any way they want. If you don’t like those terms, then don’t do business with them. The real problem is that too many people take those terms. In fact, if ATM cash advances weren’t so popular, credit card companies might have to then actually loosen their terms!
The key for you then is to obviously avoid ATM credit card advances until very dire emergencies, and even then, only as the last resort of last resorts.
Joshua Shapiro recommends Find Credit Cards to find an HSBC NV credit card that’s tailored to suit your financial needs.
Article Source: ezinearticles.com|
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