You work hard for your money and you want to get the most out of it. And no matter what job you have, you will most likely utilize direct deposit in order to get your paycheck each month. After that, what you do with your money is up to you. You can spend it, invest it, save it, or put towards whatever you want.
The purpose of direct deposit is to save you time and make your money as easy to access as possible. But what if your direct deposit form allowed you to put your money into a risk free account that allows it to earn interest and grow over time? This is what an online savings account can do for you.
What exactly is an online savings account?
An online savings account can be viewed the same way as a traditional savings account is. Except the fact that your account is at an online bank that does not have brick and mortar buildings all over town that you can visit. And in turn for not having buildings to staff and maintain, an online bank can offer you a much better interest rate on your money. Most of the time, more than 10x the interest of a traditional bank. Some even offer cash bonuses just for opening an account.
Keep in mind, the purpose of a savings account is to put money there and not touch it, so that it can grow as much as possible. You still get the same features, most of the time no fees, and service as you would with your traditional brick and mortar bank. You can even link an online savings account to your current checking account if you need to transfer money back and forth. An online savings account is the same product, plus an interest rate that can show you a decent risk free rate of return over time.
Your Direct Deposit Form
Now, what does an online savings account have to do with your direct deposit form? On your direct deposit form you can decide where you want your paycheck to go, and you can spread it out over different accounts if you want. This is where you need to decide how much less money you can live with each paycheck. Then, you have that amount deposited into your online savings account each paycheck. That is the only work required to be on the way to saving more money and actually putting it to work to grow.
Every paycheck you will have your checking account deposited with money that you can do whatever you want with it. But you will also have money deposited into your online savings account and over time the amount that is there will be worth it.
Once It’s Set Up, Then Forget About it
Once you set up your direct deposit with your online savings account, over time you won’t even notice the money that you are missing, that is going to your separate account. Let’s say that you can live with having $50 less per week. After a year, you will have $2,600 plus interest plus any sign up bonus that you received in your online savings account. You now have an account with a decent amount of money to do whatever you want with it.
If you needed an emergency fund, now you have it. If you wanted to open an investment account, now you have a decent amount of money to get it started. It is totally up to you. But you will be more financially stable than if you never opened the account at all and had all of your paycheck still going to your checking account. And the best part is, the more money that is in your account, the more interest it will earn. The money that you are earning at work and putting in our online savings account is truly working for you and increasing in value.
Everyone has a job for one main thing and that is to earn a paycheck. By having part of the paycheck put into an account that earns interest risk free, you are allowing your money to work for you for free. And the only thing you had to do to achieve this is fill out a form and then forget about it. By combining an online savings account with your direct deposit you will be closer to reaching any financial goals that you have sooner rather than later.
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