Online savings accounts: What they are and how they work

Are you looking for a way to grow your money without setting foot in a bank? Online savings accounts make it easy to save from anywhere, and they often come with better rates, too*. At Raisin Bank, for example, you can get up to 3.05% AER per year. On this page, we look at the different types of online savings accounts and how they work.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

An online savings account, sometimes called an online saver account, is just like any other savings account, but it’s predominantly managed online. While some online savings accounts can also be managed in-branch, even if you’re in a physical bank you’ll probably still have to access your account on a personal device such as your smartphone or laptop. In Ireland, online saving is typically offered by traditional banks, such as AIB and Bank of Ireland, as well as digital-only banks and savings platforms.

Online savings accounts work in the same way as traditional savings accounts in that you earn interest on the money you deposit. Most online savings accounts allow you to make deposits from an account linked to your savings account, such as a current account. If you choose online savings accounts from a high street bank with brick-and-mortar premises, you may still be able to make deposits and withdrawals in person. For accounts with online savings banks, you’ll manage your account completely online by way of an online banking portal or app.

When deciding if an online savings account is the right option for you, it can be useful to consider their pros and cons.

• Convenient and accessible from anywhere, providing you have an internet connection on your smartphone or computer
• Typically offer competitive rates of interest

• Many are free to open, as they are at Raisin Bank, or have low fees

• User-friendly apps, such as the Raisin App
• Generally simple and intuitive to use
• Easy to open with online identity verification processes
• Considered as safe as traditional banking
• Speedy application process

• Online savings banks offer no branch access or face-to-face support from staff

• Banking apps and websites can very occasionally go down, which could cause interruptions

• Depositing money can sometimes be tricky

1. Register for a Raisin Account. Check how to register to create your free Raisin Account. You’ll need to provide some personal information and verify your identity online.
2. Browse and choose a savings account. Take a look at the savings accounts available from Raisin’s partner banks. Compare interest rates (AER), minimum deposits, and terms to find the best option for your needs.
3. Apply online. Once you’ve found an account that appeals to you, you can apply directly through the Raisin platform. This whole process takes place digitally without needing to visit a branch.
4. Fund your account. Transfer money from your linked bank account to your new savings account. You can usually do this via bank transfer.
5. Keep an eye on your savings. Track your savings, the interest you’ve earned, and manage your account easily through Raisin’s online dashboard.

The main difference between online savings accounts and traditional savings accounts is that you can manage your account online. You can access your account any time you wish, providing convenience if you are unable to visit a branch.

Online savings accounts in Ireland often feature more competitive interest rates than traditional accounts. It’s always best to shop around and compare different savings accounts.

An online savings account is a great option if you need your savings to be easily accessible, for example if you don’t drive or can’t get to a bank branch to open or manage your savings account.

They may also be a good choice if you get motivation to save by checking your account regularly from the comfort of your own home. Online savings accounts also typically allow you to transfer money into other accounts, which is convenient in situations where a family member or friend lends you money and you wish to transfer it back to them.

When you open a savings account online, it’s helpful to consider your savings goals. You should also check whether the account has an application or monthly fee, how easy it is to make deposits and withdrawals, and whether there’s a minimum deposit to open the account. If setting up automated monthly deposits is important to you, you can factor that in too. Taking these first few steps can help you find the best online savings account for you.

As with their offline counterparts, there are many different types of online savings accounts in Ireland, including fixed term deposits and instant access savings accounts. Here are some things to consider when choosing the right online savings accounts for your needs:

Do you want to save for a holiday, a new car, a wedding or a house? Are you perhaps saving for retirement? Determining your savings goal will help you identify the right online savings account for your needs. For example, a lump sum account might be best if you’re saving for the long-term, but an instant access savings account could suit you better if you think you’ll need to access your money quickly. Read our complete guide to how to save money for more ideas.

When you’ve identified the best type of online savings accounts for you, it’s important to compare interest rates. Comparison tables such as this one for savings accounts are a great way of getting an overview of what’s available. If you’re looking for savings accounts with very competitive interest rates and you have a lump sum deposit that you don’t need to access any time soon, a fixed term deposit might be right for you. Fixed term deposit accounts generally provide higher interest rates than standard savings accounts.

If you’re an Irish taxpayer, you’ll have to pay tax on your savings, as the interest you earn on your savings is subject to Deposit Interest Retention Tax (DIRT). In 2025, DIRT is 33%.

The deposit guarantee scheme covers all EU-regulated current or savings accounts in banks, building societies, and credit unions up to €100,000 per depositor and bank.

If you have more than this amount, you may want to consider spreading your savings across online savings accounts with different banking groups, so more of your money is protected.

To get the best interest rate on an online savings account, you’ll usually need to deposit a larger amount or agree to adhere to more stringent restrictions than you would with a different type of savings account.

For example, a fixed term deposit account will usually offer a higher rate of interest than an instant access savings account, because of the restrictions involved.

Online savings accounts are generally considered to be as secure as traditional banking. This is down to the security checks your provider can perform, which might include emailing or texting you a code in order to access your funds.

At Raisin, you can open online savings accounts featuring competitive interest rates from our trusted partner banks.

Savings accounts are free to open, and once your application is approved, you can deposit your savings and start earning money straight away.

Got any questions? Contact our Customer Services Team, who will be happy to help.

*https://www.irishtimes.com/your-money/2025/05/02/what-kind-of-savings-interest-rates-are-banks-fintechs-and-the-state-offering/