Bank Accounts Types - Learn The Differences Before Opening An Account
1T6-511 The business of banking is to be able to get depositors to put their money in the bank and pay them interest, then to loan out that money at a higher rate. Their main business is getting deposits and granting loans.
There are four different types of deposit accounts at a bank. They are savings account, certificate of deposit, money market and a checking account. Try to make sure you don't pay any fees at the bank, they will have fee structures for you to read, study this carefully. Check to see if they have a minimum balance and what those amounts are. Usually Credit Unions have minimum balance starting at $1 and banks at or over $1,000.
The first place to start if you want to save money with a bank would be with a simple savings account. Most people opened one of these as a child and kept adding money to it as they grew. Part time job earnings, Birthday or Christmas money, few dollars here and there add up. You can either walk into a bank or credit union you feel comfortable with, either the one in your neighborhood or near your workplace and open an account. You can stop in anytime and make deposits or withdrawals, meaning your money is liquid. It is not locked up for any time and there is no penalty to withdraw whenever you choose.
1T6-521 There are limitations on how many withdrawals per month you can make, each bank has different rules on this. The rules are not very restrictive and easy to stay within the guidelines of the bank.
If you feel comfortable using the internet, opening up a savings account online is also an option, one of the drawbacks is that you can't walk into your bank and take money out any time you want. Some reasons people may want an online bank is that they usually have a more competitive interest rate or a local branch of a specific bank may not be there where they live.
All banks have a minimum deposit required to open and keep a savings account in good standing. Many banks charge a monthly maintenance fee if balance drops below a certain level. These fees are small, $3 or $5, but who wants to pay anything for someone to hold your money in a savings account that you are getting a HALF a percent interest per year on?
1T6-111 A few years ago banks were paying much better interest rates around 5%, but that is not the case now, you will be lucky to find a savings account paying 0.5% interest, yes that is a HALF a percent interest rate. And that rate is per year, not per month.
Money market accounts are also considered liquid funds, you can have access any time you wish, they are not tied up or restrictive. A money market account is a type of savings account through a bank or credit union.
There are four different types of deposit accounts at a bank. They are savings account, certificate of deposit, money market and a checking account. Try to make sure you don't pay any fees at the bank, they will have fee structures for you to read, study this carefully. Check to see if they have a minimum balance and what those amounts are. Usually Credit Unions have minimum balance starting at $1 and banks at or over $1,000.
The first place to start if you want to save money with a bank would be with a simple savings account. Most people opened one of these as a child and kept adding money to it as they grew. Part time job earnings, Birthday or Christmas money, few dollars here and there add up. You can either walk into a bank or credit union you feel comfortable with, either the one in your neighborhood or near your workplace and open an account. You can stop in anytime and make deposits or withdrawals, meaning your money is liquid. It is not locked up for any time and there is no penalty to withdraw whenever you choose.
1T6-521 There are limitations on how many withdrawals per month you can make, each bank has different rules on this. The rules are not very restrictive and easy to stay within the guidelines of the bank.
If you feel comfortable using the internet, opening up a savings account online is also an option, one of the drawbacks is that you can't walk into your bank and take money out any time you want. Some reasons people may want an online bank is that they usually have a more competitive interest rate or a local branch of a specific bank may not be there where they live.
All banks have a minimum deposit required to open and keep a savings account in good standing. Many banks charge a monthly maintenance fee if balance drops below a certain level. These fees are small, $3 or $5, but who wants to pay anything for someone to hold your money in a savings account that you are getting a HALF a percent interest per year on?
1T6-111 A few years ago banks were paying much better interest rates around 5%, but that is not the case now, you will be lucky to find a savings account paying 0.5% interest, yes that is a HALF a percent interest rate. And that rate is per year, not per month.
Money market accounts are also considered liquid funds, you can have access any time you wish, they are not tied up or restrictive. A money market account is a type of savings account through a bank or credit union.
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