Many people believe that only banks offer savings accounts. That is certainly not the case. So do credit unions, for example, and they often provide better rates and overall terms than the banks do. There are many types of savings accounts, and your financial institution of choice should have representatives providing the details of these. If you need more in-depth information about the different types, with you choosing the best one for yourself, do not hesitate to ask a bank representative. If no answers are coming, you may have a problem. The staff responsible for new accounts should answer all your questions and tell you if more than one type of savings account is available. You must present some kind of ID document, such as the social insurance number of your driver’s license.
Savings accounts are the most common type of a bank account. Savings accounts keep your money safe while earning interest on it on a month-to-month basis. You must deposit a small initial sum to open a savings account. Some financial institutions do not require a minimum balance at all. This depends on the account type and the institution itself.
Savings accounts are very beneficial because there is a lower probability that you will spend your money. Plus, it will be insured for your peace of mind. If you keep your money at home, you risk getting it stolen. And if your house burns down, it will be lost forever.
Interest rates vary depending on the type of savings account you go for. Interest is what the bank pays to you so that your money can be used to finance loans to other clients. You can withdraw your money at any time. The interest on the loans extended to other clients is slightly higher than the interest you get as a savings account holder. This is how banks make a profit.
The two most typical types of savings accounts that financial institutions offer are basic savings accounts and money market accounts. The basic account, as described above, requires either a low or no initial balance, but the interest rate is low as well. The money market account is the opposite – it requires a bigger balance, and the interest is higher.
Finally, when opening an account, you should look at the fees and service charges. Other issues to consider are the bank’s accessibility, the services offered, its customer service, and the interest rates. Obviously, banking is an important part of your daily life, and it is best to use the services of a bank that is accessible. If the chosen bank has a local branch near your home or work, the maintenance of your savings account will be easier and more convenient.