Differences between traditional savings Vs. Online savings
Saving money is one of the common modern financial activities in today’s word. Compared to several traditional forms of saving such as piggy bank, saving money in a safe, opening a savings book, etc., there has been a new smart savings form called online savings.
Since it has been developed, online savings has been preferred by a large population of people due to its certain amount of benefits. So what makes it different than traditional savings and why is it preferred? Find out the differences between traditional savings and online savings in the following article.
What is traditional savings?
Traditional savings is a form of savings provided by most banks to help people keep their money in a safe place or even earn interest from it. Upon opening a traditional savings account, customers will be required to choose a fixed deposit term that comes with a fixed interest rate. All procedures of traditional savings are usually carried out at the bank’s branch, from opening a savings book/account to the withdrawal of their savings account.
What is online savings?
Online savings is a widely used form of savings in today’s digital world. This form of savings helps people to open a savings account anytime and anywhere via their electronic devices instead of having to visit a bank’s branch. Banks offering this form of savings also provides attractive interest rates and flexible deposit terms for their customers.
Differences between traditional savings vs. online savings
In general, both of these forms of savings bring financial benefits to people as they both help people to keep their money in a safe place and generate profit from their savings amount. However, they are different in the way they work and can be used.
Traditional savingsOnline savingsCreate a savings account– To open a savings account, you would have to arrange your time to be suitable with the working hours of the bank. As most banks have a system where you have to wait for your number to be served, this can also be time consuming.
– Traditional banks also require several different procedures and documents. A few words of errors can also mean that you have to fill out the required documents again.
– Being available 24/7 is one of the most outstanding features of online savings. As long as your device is connected to the Internet, you can create a savings account anytime and anywhere instead of going to the bank.
– Opening an online savings account does not require several different documents and can be done within a few steps.
Maintain a savings account– Once you open a savings book, you would need to keep it carefully. If you lose your savings book, you would have to wait several weeks and go through a variety of verification procedures to get a new one.
– You would have to pay different service fees associated with savings, such as penalty fee for early withdrawal.
– As every procedure is digitalized, you would not need to worry about keeping your savings book safe.
– Online savings can also allow people to split their savings amount into smaller accounts to make sure they do not lose all of their interest in cases they need to withdraw some money from their savings amount ahead of time.
– Fees associated with savings are minimized or even free.
Withdraw a savings account– At the end of your chosen deposit term, you must visit your bank to complete the settlement and sign relevant documents. At certain traditional banks, you are only allowed to withdraw your money at a branch where you open your savings account.
– If you withdraw your savings account ahead of time, you will lose all the interest that you can possibly earn.
– At the end of your chosen deposit term, you can withdraw your money directly in the app or via the bank’s website.
– If you split your savings amount into different savings account, this will help you to maintain interest for the other savings account that are not withdrawn ahead of time.
If you are the type of people who like things to be carried out quickly without any hassle, online savings is a suitable form of savings for yourself. In addition to all the convenience it comes with, online savings can also provide other benefits such as flexible terms, attractive interest rates, safety. With online savings, people can easily save the time and effort that they would have to spend if they choose to open a traditional savings account.