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An online savings account (OSA) is a savings account managed and funded primarily on the Internet.
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An online savings account (OSA) is a savings account managed and funded primarily on the Internet.
OSAs are often characterized by higher interest rates or lower fees compared with traditional savings accounts. Many high-yield accounts have no minimum balance. Account holders may link their OSAs to external bank accounts for transfers, and some accounts provide ATM cards for direct access to funds.
Banks offering OSAs may operate without physical branches, so deposits are commonly made in the US via ACH transfer, check mailing or direct deposit. Withdrawals are typically conducted through ACH transfers to another account or by requesting a check.
OSAs, combined with rising interest rates, have made cash a more attractive option for some investors, particularly during periods of economic uncertainty and market volatility. Inflation, recession fears, and stock market fluctuations have encouraged investors to use OSAs to balance their portfolios. In 2005, more than 8.5 million customers opened online savings accounts with leading U.S. banks, and some industry estimates projected that the market could grow from about $250 billion to $400 billion by 2010. [1]
Specific examples:
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