Types of Savings Accounts
By: Julia Reccardi
Regular Savings Account
A regular savings account is a type of account that is offered by almost all banks. You can sign up in person, on the phone, or online. To open a regular savings account you have to have a minimum balance. Two advantages of a regular savings account is it's easy to set up and maintain and it's quick and easy to move money between two accounts. Two disadvantages are it has low interest rates and it doesn't make the money work for you.
Online Savings Account
An online account is a type of account that is through the internet. Two advantages would be it pays higher interest rate and there is no minimum deposit required. Two disadvantages would be there is a monthly maintenance fee and it may take longer to access the money.
Money Market Deposit Accounts
A money market deposit account is a type of account where you are limited to a certain amount of withdrawals per month. Two advantages would be you have check writing privileges and it has a higher paid interest than regular. Two disadvantages would be there is a higher minimum balance and there a monthly fees.
Certificates of Deposit (CD)
A certificates of deposit is where your money has a maturity rate. That means that you can only take the money out when it is mature enough. Two advantages are there are fixed interest rates and you can't take your money out till it matures. This is good because then you wont spent it on something you don't need. Two disadvantages would be that it has to stay in the bank till it matures and if you needed it for an emergency, you wouldn't be able to get it and if you take the money out before it matures, you have to pay a fee.
Automatic Savings Plan
An automatic savings plan is an account that automatically puts money in the bank each month. Two advantages are that you don't have to remember to put money in the bank each moth and you are paying yourself first. Two disadvantages would be if something went wrong and they out the wrong amount in or if you run out of money in the first account.