Are online banks good choices for your piggy bank?

Turn your old-fashioned piggy bank into a gold mine by moving your savings into an online bank.

The piggy bank is the icon of saving. Those little porcelain pigs gobbled up our first allowances, birthday gifts and raffle winnings, keeping them safe for a rainy day. They're the repositories of found pennies and pocket change.

Piggy banks are great. What's even better than a piggy bank? An interest-bearing savings account. Keeping your savings in an FDIC-insured bank not only protects it from loss, it also lets it earn interest. Unlike a piggy bank, where the money is just sitting there gathering dust.

Most savings accounts pay little in interest, especially these days. But with a little Internet research you can get a decent rate of return from a high-interest savings account at an online bank.

Online banks offer other advantages, too.

An account for each goal

They generally allow customers to have a number of subaccounts that are easy to organize and move money between. This makes them ideal for managing children's allowances or saving for a particular goal like a family vacation or a new couch. In other words, the same kind of things you might use a piggy bank for.

It's easy to transfer a few dollars into each child's allowance account each week, and easy to track your progress towards that new sofa. Your savings are earning interest, and the sub-accounts take a lot of the organizational effort off your shoulders.

Keep Sticky Fingers Off Your Savings

Another great feature of online savings accounts is their inconvenience for withdrawals. You can't just reach into the jar and scoop out some change because it's a hot day and you want ice cream. The money is fairly easy to access, but you have to transfer it to your regular account and then withdraw it. The process can take a few days. That lag time insulates your online savings account from impulse spending. You might feel frustrated in the moment when you can't have those exciting red shoes, but over time you'll be grateful for this roadblock as you see your savings grow.

Don't Trash That Piggy Bank Yet!

You want to keep your savings in your online, high-yield savings account. But how do you get them there? Your little desktop piggy bank is still a great place to accumulate spare change and birthday money. When it's full, you can deposit the lot into your savings account.

Of course you can also make more frequent deposits. But if you're not the type to make a daily run to the post office with a deposit envelope (and face it: most of us aren't), your piggy bank will keep your coins cozy till you're ready to make one larger deposit.

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