by MaryAnn Evans

Created on: November 17, 2011

Having an online savings account has its advantages. It offers security, convenience and efficiency. However, there are disadvantages to online savings accounts (OSA) too. Before you consider opening an OSA, take a look at the disadvantages

1. Safety Risks

While it is convenient to have your savings online, it may not always be safe. With many crimes occurring on the Internet, such as identity and data theft, it can be risky saving money online. One wrong move, and your entire online savings will vanish in a second.

2. No Investment Guarantee

Investing in the stock market is a risky business. While it’s easy to invest, it’s hard to maintain. You need to be sure you’re willing to lose some money or you’ll regret it. Don’t go gambling with your hard-earned money online. It may yield negative results.

3. Some OSAs Are Not Safe

Be careful who you do business with. While some OSAs are safe, there are some that are fraudulent. It’s easy to dress up an ordinary website with all types of information that seems legal. If you fall for their trap, all your money will be transferred somewhere else. If you happen to see an online bank in Nigeria with a 100% interest rate, you’d best steer clear of it.

4. Some Mistakes Can’t be Undone

Making mistakes with an OSA can be quite risky and costly. If you’re not savvy with it, you can lose a big amount. Wrongly inserted information can be the cause of this, such as not putting the right card number or the right address.

5. Watch Out for The Banks Mistakes

Some banks cannot guarantee the money will come on time. “But it’s online! It should be super fast like it always is!” But don’t be so sure. Even the Internet can experience hiccups now and then. Some websites, like PayPal, experience problems frequently. Even if you put in the right information, it may lose your money when transferring it or even return your money, but you'll have to pay the returning fee.

6. If You Have No Internet, You Can’t Access Your Account

This should be obvious. Without an Internet access, you can’t withdraw or deposit your money. So, OSAs are not for the anti-techie, technophobe or just about anyone who doesn’t use a computer.

7. When the Internet is Down, Your Money is Trapped

This should be a consideration. Before you take up an OSA, always remember that the Internet can go down. If your entire life’s funds are all in the online banks, then it’s bad. This is a big disadvantage when it comes to having an OSA.

These are the disadvantages of having an online savings account. Take these into consideration before opening one. If you have made the decision, then best of luck to you. As a wise person once said, “Don’t put all your eggs in one basket” Remember, OSA is not your only option for saving money.

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