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Online Savings Accounts

Online savings accounts are operated via the internet. All online savings accounts allow you to check your balances, review transactions, transfer money and set up standing orders from the comfort of your own home.

Online savings accounts may be notice, no notice or monthly income accounts.

No notice online savings accounts do not require you to give any notice to withdraw funds without penalty, such as loss of interest.

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Notice online savings accounts require notice to be given to withdraw funds to avoid any penalty, such as loss of interest. The amount of notice that needs to be given depends on which account you choose.

Monthly income online savings accounts may be notice or no notice accounts. They pay interest monthly, rather than annually or on account maturity. These may suit you if you are looking for regular income from interest payments.

Some online savings accounts may offer facilities such as a cash card.

Things to watch out for:

• Opening restrictions – some online savings accounts can only be opened by existing members of that provider or by local residents. Minimum balances – with some of these products there is a minimum amount you have to put in to open the account.
• Withdrawals – although you may not have to give notice to withdraw your cash, some online savings accounts include conditional bonuses in their rates of interest. These often relate to the number of withdrawals that are made over a certain time period. If these are exceeded, interest can be lost.
• Unconditional bonuses – some online savings accounts include a bonus rate of interest until a certain time. These accounts can offer an attractive return at outset, but can reduce considerably once the bonus rate ends. If you choose an online savings account with a bonus rate it is worthwhile reviewing the rate once the bonus term ends.
• Rate guarantees – some online savings accounts will offer a guarantee on the rate of interest you receive, despite being a variable rate account. These often relate to the Bank of England base rate. Some rate guarantees have the same effect as a bonus.
• Conditional bonuses – These can include obtaining a higher rate of interest if you hold your current account with that provider, or if you do not make many withdrawals over a certain time period.