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Savings Account High Interest - Online High Interest Savings Accounts

A Good Deal for 2010

From freelance web designers to ebay salesmen to chronic Amazon book-buyers, the computer makes for a great one-stop financial hub when most of your transactions occur online. As online security tightens and identity theft panic fades, online banks have been offering high interest savings accounts to further heighten interest in the convenience and efficiency of online banking.

Banking is cheaper online because it removes the amount of effort on both the consumer and the bank. Real-life banks have learned to invest heavily in image, splurging on fine office furniture and grandiose architecture. Then, each bank is equipped with printers, vaults, staff, and so on. For an online bank, all issues of site maintenance are maintained by a stable of web designers who can rapidly alter the virtual architecture to suit new needs and incorporate additional features. Other tasks, which are mostly data entry, fall to the consumer. Removing so many overhead costs frees up more money for everyone, which is why online banks are offering better-than-average APY in an attempt to boost the popularity of such an efficient money-saver.

Moreover, helpful online researchers are falling over each other to categorize the online options available. Moneyning, Dmoz, Account Best Savings, Interest Savings Accounts, Savings Accounts dot Com, and a half dozen more sites keep daily tabs on which online bank is offering which savings account at the highest interest.

The most important thing to look at for these online savings accounts is the APY, or Annual Percentage Yield. Different from Annual Percentage Rates (APRs), APYs are a more honest depiction of potential savings in that they factor in accumulated interest rates. Put in simple math for the sake of explanation, suppose you had $100 and an APR of 4%, or 1% per quarter. After one quarter of saving, you would have $101. But the next quarter, you would not have $102—you would have $102.01. After one year, you would have $104.06. That is an APR of 4%, but an APY of 4.06%.

With great rates and the convenience of yet another financial task condensed into half an hour on a keyboard, online high interest savings accounts are a growing and smart trend.

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Financial Dictionary: Accounting, Business & International FinancePersonal Finance - Savings Accounts, CDs, the Stock Market, and Other Investments