Types of Bank Accounts⎥Financial Literacy

generally speaking there are five broad
categories for bank accounts according to Investor’s Guide these include saving
accounts basic checking accounts interest-bearing checking accounts money
market deposit accounts and certificates of deposit CD account very plainly are
designed to help people save money while they carry interest rates that are
generally higher than that of checking account their interest rates are low
compared to other types of accounts such as money market deposits and
certificates of deposit often these accounts do not come with checks the
second type of account is a basic checking account this type is the most
powerful event as it is the simplest bank account there is no interest is
offered by the holders of a checking account may write out checks or use a
debit card that withdraws money street from the checking account while there
are little to no service is offered a bank in charge fees if for example too
many checks are written in a month the third type is an interest bearing
checking account the only difference between this and the previously
mentioned basic checking accounts are the added services and the added
interest however interest-bearing checking accounts often require a higher
costs to maintain since a higher fee is associated with this type of account
users of interest-bearing checking accounts can often write an unlimited
amount of check the fourth type in the money market deposit account otherwise
known as mmm DA’s the other counts require a higher minimum balance
compared to interest-bearing checking accounts but do boast a higher interest
rate banks take the money and invested in short-term debt such as treasury
bills unlike interest-bearing checking accounts money market deposit accounts
offer a limited number of checks per month and charged for extra checks
written lastly are certificates of deposit which
are also known as CDs view that counts are known to be relatively long-term
investment as an individual agreed to loan the bank a certain amount of money
for a specific amount I’m normally ranging from three to six years these
accounts generate the highest interest compared to the other types as during
the time the bank loans money the capital is inaccessible to the lender
each CD has a maturity date on which the lender is allowed to retrieve the money
back from the bank with the addition of interest however if one decides to
withdraw money before the maturity date the bank charges are steeped feet hope
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