Higher Interest Rates

• An online account can pay you a little more in interest because online banks do not have as much overhead as physical banks. This typically allows the online banks to extend these savings to you in the form of slightly higher interest rates. While the rates are not significantly higher or comparable to putting your money into mutual funds or stocks, you can make a little more money with this type of account.
  
  

Fewer Fees

• Many online banks do not charge fees with basic services for which other banks do charge. They also often do not require a minimum deposit or fees to transfer money into or out of your savings account.
  
  

Less Documentation

• Many times when you set up the account you do so completely online. If you do have to do any paperwork, it is typically limited to a simple form. Then you can get all of your bank statements and other documents online. This helps the environment and also makes your life more simple.
  
  

Incentive to Save

• It typically takes a few days to transfer an online account's funds to a different account or to get a check. This means that you will be less likely to tap into the money for frivolous purchases as you would if the money was available in your local bank location.