How to open Online Savings Accounts

1. Step 1

   “Hands Off” Interest
   This is one of the easiest, “hands off” ways to invest
   and make passive income. It is often referred to as
   an automatic savings/investment account. If you have
   a checking account and a participating bank, you can
   easily set this up. The system works great for aver-
   age people who are looking for an automatic way to
   save and earn money each month.

2. Step 2

   Which Banks Offer this Service?
   I know of three major ones, but there are probably
   others. You just need to ask your bank. If your bank
   doesn’t offer this type of program, you can open
   a checking account with a bank that does offer an
   automatic savings program. I personally use Wacho-
   via’s “Way-2-Save” program. You can also use Bank
   of America’s “Keep The Change” program. When
   you sign up for a free checking account at Bank of
   America, you can receive $25 deposited into your
   new account just for signing up.
   You can sign up here:
   https://www5.bankofamerica.com/global/stateselection.action?returnUrl=https://www5.bankofamerica.com/applyonline/newapp.action&queryString=ADLINK=&CD_BAG=&CH_BAG=&NOCHECK=&OFFER_CODE=CRREM251uih6v&SA_BAG=&cust_type=&RequestTimeOut=300

   Washington Mutual
   also has a program named “Savings For Success.”

3. Step 3

   How’s it Work?
   For this experiment, we will evaluate my existing
   Wachovia “Way-2-Save” program. First, you would
   go to your bank and sign up for the automatic sav-
   ings program or register online. The concept of the
   program is simple, you use your checking account
   like usual to buy items with your debit card and pay
   bills. Every time you use your debit card or make an
   online payment, the automatic savings program de-
   posits a dollar from your checking account into your
   Way-2-Save account. With Wachovia’s program, you
   can also transfer up to $100 extra each month into
   your Way-2-Save account.

4. Step 4

   What are the Benefits of the Program?
   With Wachovia’s Way-2-Save program, there are
   several advantages over a normal savings account.
   Here are the benefits and guidelines:
   • Current yield is 5.00% APY (typical savings ac-
   counts usually earn 1-2% APY)
   • At the end of the first year, there’s a 5% bonus
   on the balance (up to $300)
   • At the end of the second and third year, there’s a
   2% bonus
   • Maximum $100 per month transfer is allowed
   into the account
   • Additional $1 deposits into the account happen
   for every debit card purchase, online bill pay or
   automated debit transaction
   • No monthly fees or minimum balance requirements
   • Only available for personal accounts, not for
   business accounts

5. Step 5

   How Much Can I Save and Earn from
   the Program?
   I opened my Way-2-Save account around March 1,
   2008. After about 11 months, I had accumulated
   $1,015 into my account. However, I don’t even use
   my debit card with this account and I didn’t start
   making the $100 maximum transfers to the account
   until months after I started. But even though I didn’t
   take advantage of all the benefits of this program, I
   am still quite happy to see an extra $1000 saved in
   my bank account after less than a year.

6. Step 6

   My Savings and Earnings
   So this is my Way-2-Save account information for 12
   months as estimated according to my savings and
   earnings so far:
   Total Savings: $1,107
   Total Interest Earned: $24
   End of Year Bonus 5%: $55.36
   Total Saved for One Year: $1,186.36
   Total Interest Earned for One Year:
   $79.36

   Note: Learn from my mistake, and start making the
   maximum $100 additional deposit into the account
   right away if possible. Also, start using your debit
   card for purchases to save and earn more.

7. Step 7

   Your Estimated Savings and Earnings
   If you follow that advice, your Way-2-Save yearly sav-
   ings and earnings could look like this:
   Year #1:
   Debit purchases a month: 20
   Online and Automatic Payments a month: 10
   Maximum Transfer a month: $100
   Balance after 1 Year: $1596.25
   Total Interest Earned: $36.25
   End of Year Bonus 5%: $79.81
   Total Saved for One Year: $1676.06
   Total Interest Earned for One Year: $116.06
   Year #2:
   Balance after 2 Years: $3358.06
   Total Interest Earned: $122
   End of Year Bonus 2%: $67.16
   Total Saved for One Year: $3425.22
   Total Interest Earned for One Year: $189.16
   Year #3:
   Balance after 3 Years: $5126.12
   Total Interest Earned: $140.90
   End of Year Bonus 2%: $102.52
   Total Saved for One Year: $5228.64
   Total Interest Earned for One Year: $243.42
   Now if you can keep this same technique going, this
   is what your balance will look like EVEN without
   the 2% bonus each year. Wachovia ends the bonus
   after Year #3):
   Year #4: $7,092.40
   Year #5: $9,051.51
   Year #6: $11,110.85
   Year #7: $13,275.56
   Year #8: $15,551.01
   Year #9: $17,942.88
   Year #10: $20,457.12
   Year #11: $23,100.00
   Year #12: $25,878.09
   Year #13: $28,798.31
   Year #14: $31,867.94
   Year #15: $35,094.61
   Year #16: $38,486.37
   Year #17: $42,051.66
   Year #18: $45,799.35
   Year #19: $49,738.79
   Year #20: $53,879.77
   ...and now with the power of compounding, it gets
   really interesting!
   Year #30: $108,927.19
   Year #40: $ 199,590.81
   Year #50: $ 348,914.66
   $0 vs. $350,000
   ...and just think, the only difference between you
   saving $0 vs. $350,000 was that you took 5 minutes
   to sign up for an automatic savings program. Had
   you made $0, you still would have been using your
   checking account the same way to pay bills and buy
   things with your debit card. So why not just take
   the small amount of time to set up this automatic
   savings/investment account, and you can begin earning some passive income by doing what you normally do.

Tips & Warnings

• When signing up for a new checking account or automatic savings/investment program, be sure to find out if there is any minimum balance requirements or annual fees. You should also make sure that you are only depositing an amount which is comfortable for you to maintain an adequate amount in your checking account each month for your expenses.