How to Decide Which Type of Bank Account to Open
Consider opening a basic checking account., Consider opening a Money Market Savings account., Consider opening a regular Savings account., Consider investing in a Certificate of Deposit (CD)., Speak with an investment representative to discuss...
Step-by-Step Guide
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Step 1: Consider opening a basic checking account.
A checking account is an account that you can make both deposits and withdrawals on a regular basis, and there are generally no transaction restrictions.
You will probably want to open a savings account with a checking account as they earn little to no interest, so your money will not grow.
A checking account also offers you the flexibility of writing checks out of the account to pay for things like your phone bill, cable bill, etc. -
Step 2: Consider opening a Money Market Savings account.
A Money Market Savings account is similar to a checking account in the sense that it allows you the flexibility to write checks out of the account.
However, a Money Market Savings account will typically have transaction limits, such as only being able to write out a certain number of checks per month.
The benefit to opening this type of account is that you will earn a higher interest rate than you would on a checking account.
Interest rates on a Money Market Savings accounts generally go up in tiers, and you will earn interest based on the total deposit balance you are carrying in the account. , A regular savings account is a great option for just about everyone.
You can also make regular deposits and withdrawals without transaction restrictions when you have a Savings account.
A Savings account also offers you the benefit of earning interest, just like a Money Market Savings account would.
However, a Savings account earns a regular interest rate that does not vary, even if your deposit balance changes.
This is a great way to save money for kids that may be saving up for college, a car, or their future house. , A certificate of deposit will generally earn you a higher interest rate than any other type of account.
However, there are downsides to investing in a Certificate of Deposit.
First, you will need to commit to having your Certificate of Deposit for a certain time period
- generally anywhere from 1 month to 10 years, or more.
The longer you choose, the higher the interest rate you earn.
Secondly, if you choose to withdraw money before your term if up (maturity date), you will be subject to penalties which will result in earning less money. , If none of these accounts are appealing to you, or you have a large amount of money that you are looking to invest, consider speaking with an investment representative to discuss alternative account options.
Generally when you look to invest with an investment representative, you will have a higher risk of loss, but you may also have the chance of earning more money from your investment. -
Step 3: Consider opening a regular Savings account.
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Step 4: Consider investing in a Certificate of Deposit (CD).
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Step 5: Speak with an investment representative to discuss alternative options.
Detailed Guide
A checking account is an account that you can make both deposits and withdrawals on a regular basis, and there are generally no transaction restrictions.
You will probably want to open a savings account with a checking account as they earn little to no interest, so your money will not grow.
A checking account also offers you the flexibility of writing checks out of the account to pay for things like your phone bill, cable bill, etc.
A Money Market Savings account is similar to a checking account in the sense that it allows you the flexibility to write checks out of the account.
However, a Money Market Savings account will typically have transaction limits, such as only being able to write out a certain number of checks per month.
The benefit to opening this type of account is that you will earn a higher interest rate than you would on a checking account.
Interest rates on a Money Market Savings accounts generally go up in tiers, and you will earn interest based on the total deposit balance you are carrying in the account. , A regular savings account is a great option for just about everyone.
You can also make regular deposits and withdrawals without transaction restrictions when you have a Savings account.
A Savings account also offers you the benefit of earning interest, just like a Money Market Savings account would.
However, a Savings account earns a regular interest rate that does not vary, even if your deposit balance changes.
This is a great way to save money for kids that may be saving up for college, a car, or their future house. , A certificate of deposit will generally earn you a higher interest rate than any other type of account.
However, there are downsides to investing in a Certificate of Deposit.
First, you will need to commit to having your Certificate of Deposit for a certain time period
- generally anywhere from 1 month to 10 years, or more.
The longer you choose, the higher the interest rate you earn.
Secondly, if you choose to withdraw money before your term if up (maturity date), you will be subject to penalties which will result in earning less money. , If none of these accounts are appealing to you, or you have a large amount of money that you are looking to invest, consider speaking with an investment representative to discuss alternative account options.
Generally when you look to invest with an investment representative, you will have a higher risk of loss, but you may also have the chance of earning more money from your investment.
About the Author
Brittany Reynolds
Creates helpful guides on cooking to inspire and educate readers.
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