Comments on: Internet Savings: What it Is and Why it Will Dominate the Future of Personal Savings

By: Carnival of Personal Finance – Gettin’ Hot in Here Edition

Carnival of Personal Finance – Gettin’ Hot in Here Edition — Thu, 01 Jan 1970 00:00:00 +0000

[...] from PT Money presents Internet Savings: Why it Will Dominate the Future of Personal Savings, and says, “Saving money is easy these days because of the internet savings account. [...]

By: The Financial Blogger

The Financial Blogger — Thu, 01 Jan 1970 00:00:00 +0000

I agree that internet show great possibilities but I see a lot of banks (in Canada) that are offering high yield savings account that are very comparable to what is being offered on the internet. It was only a matter of time before regular banks show their teeth.

I guess there is nothing innovative that offering the same product at a cheaper price. It only benefits from the customers who can now access to a real savings account that will keep his money safe instead of grudging a few bucks each month in fees

By: PT

PT — Thu, 01 Jan 1970 00:00:00 +0000

I agree that internet savings is a lead-in whether online or off. The difference is that the virtual playground offers many advantages over the traditional savings accounts. Thus, they are free accounts with high interest. I’d rather play there.

By: The Financial Blogger

The Financial Blogger — Thu, 01 Jan 1970 00:00:00 +0000

You think that internet savings companies are not using their savings account to push their lousy products? They get you in with the high yield savings account and then, they offer you other products such as CD’s and mortgages. It’s the same game regular banks plays, they only do it on the virtual playground

I must admit that I am not a big fan of emergency fund either. I would rather have an unused 10K line of credit if I ever need liquidity while taking my money to invest in my retirement account or for my kids’ education.

People should take control and responsibility for a lot of things… unfortunately they don’t do it most of the time

By: PT

PT — Thu, 01 Jan 1970 00:00:00 +0000

“Beside building an emergency fund, I don’t really see the point.”

This whole post is about building personal savings. That’s what an emergency fund is. I would never advise someone to save for retirement in a savings account.

I realize the truth in this post is threatening to those in the financial services industry who’ve long used the savings account as a tool to push their other lousy products.

People should take control and responsibility for their own savings.

By: The Financial Blogger

The Financial Blogger — Thu, 01 Jan 1970 00:00:00 +0000

“When I read “personal banking relationship” the only thing that comes to mind is fees and bank employees pushing commission-based products on me. The brick and mortars are a dying breed.”

I disagree with you. As a financial planner, I am able to improve significantly the financial situation of my clients. Most people think they can manage their finance alone and they are wrong. They get fooled by “high yield savings account” at 2% and think they make a great deal. They chase rates without strategy. They don’t even look at opportunities.

High yield savings are good for what they are: letting money dying in an account with a small interest so you think you are making money. Beside building an emergency fund, I don’t really see the point.

If you are looking for real financial advice, you have to find a real financial advisor

Internet bank are like internet pharmacy where you order your medicine upon your own diagnostic; to use at your own risk !

By: myfinancialobjectives

myfinancialobjectives — Thu, 01 Jan 1970 00:00:00 +0000

I agree both with you, and Meghan:)

Also great follow up point concerning how the brick and mortars have their place despite horrible savings accounts.

I would not be surprised if down the line the only way to have a savings account was with an online bank. I mean, who would not want 1.10% compared to .6% if it was just as easy to use??

By: Meghan

Meghan — Thu, 01 Jan 1970 00:00:00 +0000

I love them because the money actually STAYS there unlike in some of my other savings accounts. =)

By: PT

PT — Thu, 01 Jan 1970 00:00:00 +0000

@Mr.GoTo – Keep in mind I’m just talking about personal savings, not online banking vs non-online banking. The brick and mortars have their place, but their savings accounts are a horrible product.

As for high-interest checking account, most come with a ton of hoops to jump through to get a good rate. Plus, it’s not a separate savings account. It’s a checking account. There is a huge difference with regard to success with savings. Spending and saving in the same account don’t mix well, imo.

When I read “personal banking relationship” the only thing that comes to mind is fees and bank employees pushing commission-based products on me. The brick and mortars are a dying breed.

By: Mr.GoTo

Mr.GoTo — Thu, 01 Jan 1970 00:00:00 +0000

I disagree. Virtual banks are limited in how they can make money if all they offer is savings and checking. I am getting better interest rates on free interest-checking from a local brick and mortar bank that offers other products to its customers. So the “sweet deal” theory is not yet reality in all cases. I agree that virtual banks are poised to take low net-worth customers from the “too large to fail” banks. But do not discount the value of a personal banking relationship for moderate to high net worth customers.

I do understand why many PF bloggers favor the large internet banks.