Internet savings accounts offer better interest rates on average than high street savings accounts, the reason being that the overheads of setting up and administering the account are lower and the savings can therefore be passed on to you.

Having an Internet savings account brings you the convenience of being able to manage your savings whenever it suits you, 24 hours a day.

Most Internet accounts will allow you to check your balance, make transfers and view statements for the period of your choice.

In addition to making an online transfer into your savings account, money can also be paid into the account through a standing order or by sending a cheque in the post.

Money can be taken out of your account by either requesting a cheque to be sent to you, or by electronically transferring funds to another account.

Some online savings accounts go a step beyond offering market leading interest rates. Some banks / building societies will offer some form of guarantee associated with their Internet savings rates. For example, the Egg Savings Account (Internet) guarantees that the gross rate will be at least equal to the Bank of England Base Rate until the end of 2007.

The only potential disadvantage of an Internet savings account is that statements may not sent in the post, and some people prefer to be able to walk into a high street branch and physically pay in cheques themselves.