Growing your wealth slowly and surely requires patience, skill and most obviously, money. Saving and investing go hand in hand, and the patience and foresight learned from saving proves to be invaluable when starting out as an investor. As a budding investor you will be presented with an enormous amount of opportunities to invest your money and eventually (hopefully) you will build a portfolio of differing assets to suit your investing style. But where to start? What if your bank account WAS your investment? Enter the online savings account, a perfect introduction to investing.
A range of banks and financial institutions vie for your money with feature packed bank accounts and enticing introductory rates. I like the online savings account offered by Newcastle Permanent. These accounts are designed for practicality, using your EFTPOS card daily is no problem and you can enjoy online shopping safely and easily.
These accounts are great for spending money, but we are trying to save and grow our money. An online savings account is different, it forgoes purchasing functionality and does not offer an EFTPOS card or the ability to withdraw cash directly from the account. Because these accounts lack traditional features, they cost less to service meaning they offer much better interest rates than a normal everyday account. The rate of interest alone should convince you of an online savings accounts investment potential, but there are many other benefits.
Small initial outlay
These accounts do not usually need a large initial outlay to reap the rewards. Most online savings accounts offer good rates of return. A good online savings account like the one offered by Newcastle Permanent, require less than $10 initial deposit so you can start saving and investing straight away. This makes it perfect for children learning the basics of investing and saving. Best of all, most of these are no fee savings accounts so your returns will not be eaten away by bank fees.
The concept of earning interest from a lump sum is not exclusive to online savings accounts. There are a few products offered that are designed to help you earn interest off your money. A term deposit is one such product and it offers similar rates of return to an online savings account. The drawback to these investments is they are rigid, locking your funds away for a fixed term with no possibility of adding more funds or withdrawing them if need be. An online savings account does not suffer from these limitations and as such is a nimble and flexible investment.
Not readily accessible
The lack of physical bank card or ability to take money out straight away might seem like a drawback, but we are trying to save money remember? These accounts are perfect if you are constantly being tempted by new purchases. You can still take your money out of an online savings account, but you will have to transfer it into an everyday account first. This extra layer of effort required to access your funds can help reinforce a saving and investing mentality. An online savings account is a supreme and engaging learning tool for both skills.
On online savings account is easy to set up and requires little to no capital. This ground floor doorway to the world of investing also provides insight into the fundamentals of growing wealth. Perfect for children or anyone wanting to make their money start working for them. The flexible nature of the account encourages a deeper interaction than other forms of investment and is one of the safest ways to invest your money. As always, be sure you compare online savings accounts before committing to one as a better deal could be just a phone call away.