Why Students in USA Should Open An Online Savings Account
Checking Account usually don’t pay Interest Rates. My emergency funds are at Online Savings Account. But, I do have an online savings and checking account.
Lets talk about personal finance, savings, interest rate and Online Savings Account in this post.
I was chatting with couple of students and discussion about money came up and his they were managing the finances.
International Students and Banking
Student who is coming to USA for the first semester bring fees for 2 semester and living expenses for upto one year.
- Semester Fees – About $15,000
- Living Expenses – About $5000
After students come to the campus, they open checking accounts with a bank near the campus.
After Orientation and course registration, they pay the first semester fees. Rest of the money will be in checking account that doesn’t pay any interest.
Majority of the students should have got the money from the Student Loan. Interest rates in India for Student loan is around 12%.
After paying the first semester fees, most of the students have about $7,500 to $10,000 balance in their Checking Account.
Checking Account don’t pay any Interest. Nothing. Nada.
Online Savings Account
Why not deposit your money in an Online Savings Account like Ally Online Saving Account or Money Market Account?
If you have $10,000, for the first month you will earn $8. Not a lot, but that will pay for 2 Starbucks coffee or 6 McChicken Sandwich in McDonalds.
Which Online Savings or Money Market Account?
My recommendation – Ally Online Savings Account
Is My Money Safe in Online Savings?
FDIC insured banks are safe for deposit till $250,000. So, no worries about your money. Its the same case as your Checking account.
My Online Savings Account Setup
Salary comes to my Primary Checking Account.
After I pay all my bills, extra money at end of the month will be transferred to Online Savings Account.
If you want more flexibility with withdrawing your money, you can open Money Market Account.
Online Savings and Money Market Account
The main difference is how you access your money.
- A money market account gives you more access because you can be issued a Debit Card and checks for these accounts.
- An online savings account does not support the use of checks and does not come with a debit card. I typically get the money via online account to account transfer.
I don’t recommend investing in stock markets while you are in school. Be conservative with your money.
You can try your luck in stock markets after you have sufficient savings.
There are several other online savings account, do check them out.
My recommendation would be Allly Bank’s Online Savings Account or Money Market Account and earn some money.
Note – I do get small referral fees if you sign-up for savings account through the above links.
Not good advice.Earning interest is haram.Sorry but you should encourage people to earn money to fill stomachs in different ways not getting interest money.Keep your money in checkings account!!!
What do you mean by earning interest is harm? Are you really serious?
I disagree, most people bring the fees for the first semester/have it wired to the school account directly! Loans are usually dispersed on a “need” basis to keep your interest build up low.
You can talk about interest, but would you pay upwards of $8 a month for the savings account and adhere to the minimum balance requirements always? I don’t see that as a very good option, but that’s my opinion!
Savings account is free to open and no minimum balance is required. If you don’t have cash you don’t get interest.
Ing direct and citi gives around 1 pct. that’s the best interest rate here.
Icici nri savings around 5-6 pct
Why can we not have the money in an offline savings a/c with a conventional bank?
You can have Savings account with the same bank where you have your checking account. But, interest rate will get you probably just half sandwich.
sorry. referal thinge confused me. fdic means 100k insured.
FDIC – 250k
this sound like advt. is the deposit in this bank is insured by us law.
Check the bank.Its FDIC insured. I have Online Savings Account and I have written about the same 3 years back.