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Home >> Accounts >> Online Banking/BillPay
Online Banks with Higher Interest Rates
I've been researching online savings accounts and am wondering why online banks can offer higher interest rates than brick and mortar banks. For example, Venture Bank Direct offers a 3.8% APY with no minimum, with a simple online setup. I haven't found any banks in my area offerning those rates, let alone a simple account setup.
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 Often the online only bank has lower costs and more automated processing than a brick and mortar bank. This allows them to pay better rates. Also, these rates can be subject to change faster, so while there is no such thing as a free lunch, banks that do a good job of keeping costs low can pay higher rates on deposits.
Published on BankingQuestions.com 11/25/08
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