Another way most online banks reduce their costs, aside from no huge branches, is to limit the ways you can access cash. Typically, you will always be able to transfer money out of your online account and into another account at a bank with branches near you. Once the deposit posts to your checking account, you can withdraw the money. Automated Clearing House transfers can take a couple of days to go through, however.
With online savings accounts, you are also limited to a maximum of six transfers out of the account per statement cycle. As Ally Bank explains on its Web site, “We'd give you more if we could. The limit is actually set by federal law for electronic and telephone transactions, as well as checks issued to third parties, from all U.S. savings and money market accounts. Remember, deposits are unlimited.”
So, to clarify, you can always funnel more money into one of these online savings products; you just can’t withdraw from it more than six times per statement period.
Photo Credit: Getty Images