What exactly is an Internet savings account? For our purposes, it is an account that's only offered online. While you may be able to bank with the same institution the old-fashioned way (in person), Internet bank accounts are usually only offered to online users. Aside from the ability to bank in your bathrobe, what are the major advantages of Internet bank accounts? The answer is simple: Annual Percentage Yield (APY). They give you greater interest earnings for your savings.

The greatest drawback of all Internet accounts is that the funds are not always  immediately available. For that reason, it is recommended that you open an emergency account that you can access on short notice.

While Internet bank accounts can help you earn more interest, you have to make sure you choose the right one. Compare the most common features of Internet bank accounts and decide which ones are most useful to you.

Key Considerations for Internet Bank Accounts
When shopping for an Internet bank account, you'll want to look at some key features. Not every bank offers everything, so you have to decide how important each is to you.
• APY. Usually the most important attraction for rate shoppers.
• Access to the money. If you want to take it and spend it, how much work do you have to do to get it?
• Number of linked accounts. Can you set up a network of accounts and zap money back and forth through your internet bank account?
• Additional products and services. Can you buy CDs, get a mortgage, or pay bills online?
• Leverage of existing banking relationships. If an institution that you already deal with has an Internet bank account, you may qualify for some extra perks by keeping all of your business in one place.
• Customer service options. How easy will it be to get questions answered?
• Automatic savings plans. Can you put it on auto-pilot and let the money accumulate automatically?
• Safety and security. Is the bank FDIC insured, and do you trust their security process?

Once you compare the features of various Internet bank accounts, you can decide which one is best. For example, you may decide that APY is most important to you. Therefore, you wouldn't care about any other options—you'd just pick the bank with the highest APY. With these thoughts in mind, we'll examine three institutions that offer online savings accounts.

The ING Direct Orange Savings Account
Perhaps the best known of the online-only banks is ING Direct. With prominent and sophisticated marketing, ING Direct is collecting a lot of deposits. That orange ball gets consumers' attention.

ING Direct is a simple online savings account with a few extra bells and whistles. The main attraction is the APY. You can typically earn more at online banks than you can at brick-and-mortar banks. Furthermore, there are no fees for the service or minimum balance requirements. And you can literally open an account with $1.

With ING Direct, you keep your existing checking account and link it to your ING Direct account. To move money back and forth, you login (or phone a toll-free number) to your ING Direct account and request a transfer (transfers are free on the ING Direct side, however you should check with your bank to make sure they will not charge you for the transaction).

Besides a simple savings account, you have a few other options at ING Direct. You can get CDs ranging from one to five years. They also offer mortgages and home equity loans.
You can open an ING Direct account in a variety of ways. The first option is to submit your information online and skip any paperwork.
You can also print their application and mail it in. Either way, you'll need all your basic information and a checking account number.

The setup process can take several weeks. ING Direct will create a few small transactions in your linked checking account to make sure they’ve gotten all the numbers right (and that the account is really yours). After you verify these transactions and validate your PIN (which comes via mail), you are ready to start saving.

Requesting the transfers at ING Direct's website is a really easy and intuitive process, and it seems like they go through quite fast. You can also set up an automatic monthly draft if you want.

One of the first things you hear if you call ING Direct is “We take security seriously”—and it seems like they do. Each time you change something on your account, they may freeze the account for several business days and send you a letter. While this can be a hassle and slow things down, it's probably for the best.

Just remember that this is for short-medium-term cash. If you're going to spend the money next week, you probably shouldn't transfer it into your online only account. And both ING Direct  and your bank may put a hold on funds moved back and forth—they need to make sure that the funds truly arrive.

Emigrant Direct American Dream Savings Account Review
Emigrant Direct mostly does business in New York. However, you can take advantage of their services anywhere with their American Dream Savings Account. At the time of this writing, the Emigrant Direct American Dream Savings Account offers one of the highest-paying savings accounts (without imposing fees or minimums).

Emigrant Direct American Dream Savings Account is like a lot of other online savings accounts. The main attraction is the APY.

As with ING, you can literally open an account with $1. Also, with Emigrant Direct, you keep your existing checking account and link it to your American Dream Savings Account. To move money back and forth, you login to your Emigrant Direct account and request a transfer (transfers are free on the Emigrant side, but again, you should check with your bank to make sure they won't assess a charge).

Emigrant Direct compounds interest daily and credits the interest monthly. This makes for a pretty good deal. You can have up to two linked accounts with Emigrant Direct. This makes it easy to get money anywhere you need it. While more linked accounts would be desirable, two are enough to get your money from point A to point B. You can also set up automatic deposits to your Emigrant Direct American Dream Savings Account (as well as direct deposit from your employer or other income source).

Opening an account is a matter of filling out an online application and verifying your identity. Emigrant will mail you a letter with the final details. They do this for security—if the letter makes it to your home then they know where to find you (and it indicates that you're probably giving truthful information). They do provide a toll-free number if you want to speak with a representative.

HSBC OnlineSavings Account
HSBC only does business in a few select regions. However, you can take advantage of their services anywhere with their HSBC OnlineSavings Account. At the time of this writing, the HSBC OnlineSavings Account offers one of the highest paying savings accounts without imposing fees or minimums.

Again, you can literally open an account with $1.

With HSBC, as with the other online accounts, you keep your existing checking account and link it to your HSBC OnlineSavings account. To move money back and forth, you login to your HSBC account and request a transfer (again, transfers are free on the HSBC side).

Now, the big difference between HSBC and the other online accounts is that the HSBC online account gets you a decent rate—and they also send you an ATM card. This makes it easy to get cash fast, and you can keep your daily spending money in the account—not in a lower yielding checking account. If you want to write checks with HSBC, you can link the account to a more traditional HSBC account. This will make transfers to your checking account faster than moving the money to a different institution. It's even faster to use an HSBC checking account and zap the money back and forth

There may be fees for checking accounts, however HSBC will consider all of your balances (mortgage, credit card, etc) when they calculate how much you have with them. This makes it easy to have an interest-earning checking account with no monthly fees.

Opening an account is really fast and easy. You just fill in all your personal information and wait for HSBC to make some test deposits to your linked account. The process moves fast, and your initial deposit can end up earning the HSBC OnlineSavings Account interest rate within a week.

Considering the higher yields you can earn with just a click of the mouse, it’s worth considering opening an Internet savings account. After all, it’s probably in your interest!