How To Get Passive Income Through A Digital Bank Savings Account

It's easy to see why - digital bank savings accounts often offer better interest rates than regular banks and require next to no upkeep to maintain. They also allow you to diversify your income, and the fact that you're usually backed by deposit insurance gives you safety and confidence in your investment.

This article will discuss a digital bank savings account and how you can achieve significant passive income through digital bank savings accounts. We'll also give you a list of digital banks that you can start researching on your journey to build sustainable passive income.

Savings accounts are usually thought of as places where you store your money for the short term. Banks or other financial institutions ensure savings accounts against loss due to fraud, theft, and unauthorized use. 

In contrast with traditional investments, these funds are easily accessible while still being kept safe from outside threats due to secure bank infrastructure. They provide 24/h access to your money and easy transfer of funds to related accounts on the same platform.

Savings accounts are great, but digital bank savings accounts are (in many cases) even better. 

What makes most digital bank accounts different? No minimum balance requirements! This means you can deposit as little or as much money into your account every month. 

Additionally, because of the digital nature of the bank, overhead is drastically reduced - you usually don't have to pay a monthly or annual fee to keep the account open. On average, a savings account fee is often in the neighborhood of $300US per year, which adds up over a long enough time.

Additionally, passive income savings accounts from digital banks typically offer significantly better interest rates than regular savings accounts. Whereas you might be lucky to get 0.10% at your run-of-the-mill traditional bank, many digital bank savings accounts have an interest on deposits as high as 2% (with promotional rates that go even higher).

In some cases, this can result in thousands in passive income each decade for consumers who are not interested in investing heavily into stocks or real estate but still want a reasonable return rate on their cash reserves. You get to offset inflation while keeping your money safe and secure.

If you're looking for an easy way to get passive income through a savings account without too much effort on your part, these digital bank savings accounts are worth looking into:

Revolut

This digital bank is a great option because there is no minimum deposit amount required and low (or zero!) monthly fees. They also provide incredibly low foreign exchange fees, saving consumers thousands in currency conversion costs over time.

Revolut provides a variety of vaults. There's an individual "Savings Vault," which is a great choice for the aforementioned passive income savings account. This pays interest of up to 0.65% and allows you to withdraw your money at any time. The Revolut "Savings Vault" is an excellent solution if you're going to need your money within a year or two.

You can also set up Group Vaults to build wealth and achieve your financial goals with family and friends. For example, if you're saving for a group vacation, you and your friends can all put money into one vault and see your savings grow.

SweepBank

SweepBank is a promising newcomer to the digital bank platform. As an up-and-coming institution, they provide high-interest rates with consistent income. They're part of Multitude, an international financial group that has served more than 2 million customers since 2005.

Their digital bank savings account option currently offers up to 1% interest rates on a fixed-term savings program. 

They pay your accumulated interest every end of the year unless you terminate your term deposit early. This is a good way to offset inflation when you know you're not going to need your money for a predetermined period of time.

N26

Another digital bank that offers a high-yield interest rate is N26. They offer interest rates up to 0.17% and let you access your money anytime!

Like with Revolut, one of the best parts about this digital bank option is the lack of foreign transaction fees, which can result in thousands saved over time when traveling or sending money internationally.

N26 is a fantastic service that offers most of the characteristics of a traditional bank but in a purely digital format. They have a lot to offer travelers, self-employed entrepreneurs, and freelancers, including international money transfers at low exchange rates and ATM cash withdrawals with minimal cost.

Lastly, one of the biggest benefits of building passive income through savings accounts from digital banks is the guarantee that your money is safe.

Digital bank investments under €100,000 are protected under EU law via the Deposit Guarantee Scheme. This means that any money you invest in your passive income savings account is refundable by the EU. The only condition is that the deposit does not exceed €100,000.

If you're looking for ways to offset inflation and keep more money in your pocket without hundreds of hours of research and additional work, opening a passive income savings account through a digital bank is a fantastic choice. Creating passive income streams like this not only helps you save and build wealth, but it also gives you peace of mind knowing your money is safe and secure. Happy investing!