Bank Account Tips: The Different Types of Accounts

When it comes to bank accounts, there are a variety of types available, classified into five main types. These bank account tips will help, so let’s take a look at these main types of bank accounts available today and how exactly they work.

Bank Account Tips And The Different Types

Savings accounts

The primary savings account is relatively straightforward in its function. Their aim is to encourage one to save money, but they do not usually pay a lot of interest. This type of bank account is ideal to use as a means for overdraft protection or a place to keep your emergency funds so that you don’t dip into them.

Basic Checking accounts

Basic checking accounts are probably the most popular type when it comes to bank accounts, as they are low cost and allow one to perform basic banking functions such as check writing. The downside is that they usually don’t pay interest and are restrictive in certain ways.

Money Market Deposit Accounts 

A money market account is a bank account which offers a higher interest rate than you’d get with a basic savings account. There are also fewer restrictions on a money market account and a higher minimum balance requirement.

Interest-Bearing Checking Accounts

When compared to regular checking accounts, Interest-Bearing Checking Accounts offer a more diverse set of services which usually come at a higher cost. That Includes being able to write unlimited checks. The interest rates on these accounts often depend on how large the balance is, and most charge a monthly service fee if your balance falls below a preset level.

Certificates of Deposit

That involves the account holder keeping the money in the account for a certain amount of time. The money is not accessible, so the account holder is offered a very high-interest rate which increases over time.  This option is not suited for those who may decide they want to dip into the savings, as there is a big fee for doing so.

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