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New times, call for new avenues. There is an old saying, "it takes money to make money." And for the most part this is true, especially in terms of interest. If you are a risk averter like I am, you will find this most appealing. In this day of age, banks savings accounts only pay anywhere from 0.1%-0.4% on all monies deposited. Since each bank has to cover overhead and G&A expenses, because of its "brick and mortar" buildings, these rates are drastically lower than they should be. However with the new addition of "online" savings accounts, the overhead and G&A expenses are eliminated because there is no free-standing building needed. There is no electricity, rent/mortgage, and for the most part employees. The first entrant in this market was ING Direct. ING had and for the most part still has very competitive rates. There was no savings account around that could be compared with ING. But as other bancorporations saw the growth of consumers in this area they joined the ban-wagon. Big banks such as Citibank, Emigrant (Emigrant Direct), and HSBC all now have online accounts. This was stiff competition for ING, and since these banks are so big, they were able to increase their rates higher than that of ING. This was now a market for consumers, which is better for you and I, where the company will work for their consumers i.e. increase their APY. These APY are just as competitive as CD's but lack the "constraints" of having to keep money locked away. The monies deposited are available for withdrawal immediately and only take 1 or 2 days to be deposited back into checking account if need, verse CD's where a penalty is taken if broken. This can almost be compared to a "liquid CD" account without all the restrictions of one. Granted these rates on the "online" savings accounts aren't fixed, they follow the FED funds rate for the most part, but CD's also follow the FED funds rate. This is a great way get the most bang for your buck, without all of the restrictions a similar product (CD) has, and is the best route for a risk averter who doesn't want to have market exposure (stocks). Granted equity (stocks) and debt instruments (bonds) have the best historical review for investment purposes, like always, with greater return comes greater risk. The use of online accounts assure the investor a solid investment with absolutely no risk. This can be great for both short-term and long-term investments.

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