The difference between online savings accounts and your everyday debit accounts is that online savings accounts earn higher interest and usually have features to help you save. Online savings accounts are linked to your debit account where you can transfer your money and watch it grow. These accounts have a better return on your savings because competition between institutions increased when smaller competitors introduced innovative features and lower overheads due to no branches. Features that encourage you to save more in an online savings account include:
- Higher interest rates than debit accounts
- Some offer bonus interest with strict conditions such as no withdrawals and a minimum regular deposit
- They do not provide Eftpos cards so there is no access to your money from ATMs
- Transferring your savings back to your debit account usually takes three to five business days
- Set up an automatic savings plan to have your money regularly deposited into your online savings accounts without the need to manually transfer your money around.