When you decide to make your personal financial plan, it is important to understand the different types of saving account, in order you can store your money on the appropriate way. According other people’s experience, there aren’t lot of benefits when you are using a saving account. Even though, your money will be safely tucked away from a temptation, but it will still be very reachable, with or without additional fees for unplanned withdrawals. Below are different types of saving account, so if you plan to save money and put it into an account, we recommend you to study them wisely.
Regular saving account
Like the name suggest it self, regular saving account require from you to put away money every month. You will be offered compensatory interest rates, but terms and conditions will be strict. For example: they will limit your amount of withdrawal and they will force you to make monthly deposits. These type of account are offered almost in every bank, the process of singing up is very easy, it can be done in person, or via phone or internet. This type of account can be linked with your checking account in order to have an easy transfer. If you are hoping to earn money on your savings, then don’t hold your hopes up, because this saving account will offer you low interest rates.
Money Market Account
This type of account is highly recommended for being a safe place to invest your money, because of its high liquidity. Money market account are insured by the FDIC and these is no risk involved at all. When you use this account, you deposit will have to be bigger than minimal amount, something between 100 and 2,500 dollars and the interest will be higher than with regular saving account. Money market account will limit your monthly withdrawal.
Certificates of Deposit (CDs)
This is another popular way of saving accounts, these type of accounts allow users to receive interest periodically, as long as they investment lasts. They are available at most banks that have FDIC insurance and they have time limitation over one to five years.
The longer you keep your money on saving account, the bigger interest you will get. If you decide to receive high interests, the bank will limit your amount of withdrawal. If you withdraw your money before it has reached maturity, you will have to pay small penalty charge.
Automatic Saving Plans
For people who usually spend more money than they are able to save, automatic saving plan can be perfect solution to get their budget in order. It is offered in most banks to help clients get lower banking fees, this savings plan will directly wire money from checking account into the saving account, for a certain amount of money you choose.
It may be hard for you to watch your money leaving your account every month, but on the other hand your saving account will grow every month with interest.