Checking and savings accounts can also be called transactional accounts. They are used by most customers on a daily basis and this makes them very common. Some of the things to look for when searching for a financial institution are the following: policy on the minimum balance, the limit on transactions and the schedule of fees. The checking account can also be known as the Demand Deposit Account. All banks and credit unions put limits on the amount of withdrawals for their savings accounts which are for wealth building.
Accounts can come in all various types. Very few checking accounts pay interest, but there are several that do pay interest. Money markets and certificates of deposits are a couple of the types of savings accounts. The certificate of deposit usually has a interest rate that is higher than the money market. Most banks require the money to be left in for a specific amount of time, if not there are penalties that will have to be paid.
Checking and savings can be maintained through several different methods. A teller is always available if you want to go in the bank physically. Online banking is available 24 hours, 365 days of the year for many transactions. This is great for savings accounts for children, since they live on the internet anyway.Debit card use is very popular and can be used for numerous purchases.
Money markets are available at credit unions or banks at competitive rates. Money markets normally have a short term or maturity and are highly liquid. Some common types are, the treasury bill, commercial papers, the certificate of deposits and the municipal note. Keep in mind, that most will have an initial minimal deposit requirement. The deposit may be $2,500 or less.
You should be aware of the minimum balance that you must maintain, in order to secure a interest rate that is higher. Sometimes there is an optional withdrawal within a 30 to 60 day period. Compare all interest rates at the different financial institutions. The institution should offer, daily compounding, of interest rates that pay a monthly fee. Interest rates vary between the financial institutions. The larger your account, the greater the interest rate should be for the customer.
Ask the institution that you are planning to do business with, if they insure money markets, through the Federal Deposit Insurance Corporation (FDIC). Many times, money markets are not covered by the insurance. This is something you must know before making an investment. Money markets normally allow only a specified number of transactions, which is often five or less per month. The transaction is usually inclusive of: money withdrawal, transferring, and writing checks.
Checking accounts are provided in several varieties. The different varieties have their own unique requirements and fees. Personal, can be either free or basic. Basic, puts limitations on the checks to be written each month. Free places no limits and has no fees. Joint is for a couple or two individuals. Student is for college or high school students.
Checking and savings are your tool for managing the household expenses and maintaining control over things. It is probably good to check everything thoroughly at least once a month. If you are not the only one involved you will definitely have to have some good communication with regard to the finances.
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