Types of Savings Accounts

Opening a savings account is the easiest way for people to save and earn money at the same time. It is the simplest form of investment. There are different types of savings accounts which vary according to your type of needs. Before opening an account with your local bank. here’s a quick run-down to understand the different types of saving accounts in order for you to find the most suitable one for you.

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Regular Savings Accounts

Great for people who plan to make monthly deposits and earn an interest at the same time. This are also referred to as “Passbook Accounts” and offers the greatest freedom to control your account.

Benefits:

• Easy to access
• Has low or no minimum maintaining balance
• No limits in making withdrawals
• No withdrawal charges

Shortfalls:

• Low Interest rates
• Interest rates change with the market

Money Market Accounts

Money Market Accounts offer some the benefits of regular saving accounts and CD’s. Money Market Accounts offer the flexibility of regular saving accounts and higher interest rates of CD’s.

Benefits:

• Higher interest rates compared to regular savings accounts
• Easy to access
• No withdrawal charges above maintaining balance

Shortfalls:

• High maintaining balance
• Limited access to funds or withdrawals
• Limited check releases
• Interest rates fluctuate with the market

CD’s (Certificate of Deposit)

Also known as “time deposits,” CD’s offer the biggest interest rates among saving accounts. Interest is made by putting your savings for a pre-determined time. Charges are applied when withdrawals are made before maturity.

Benefits:

• Offers the highest interest rates
• Fixed interest rates

Shortfalls:

• Charges apply when withdrawals are made pre-term
• Withdrawals made pre-term are made with notices ahead of time