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    1.types of Bank Accounts

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    Louie Lontiong
    Checking accounts provide easy access to deposited funds with no minimum balance but can incur fees if overdrawn. Savings accounts earn interest but have restrictions on withdrawals and usually require a minimum balance. Money market accounts combine aspects of savings and checking accounts, offering higher interest than savings and limited check/debit access. Certificates of deposit (CDs) provide a fixed-rate, low-risk way to invest for a set time period but have early withdrawal fees. Individual retirement arrangements (IRAs) allow tax-favored saving for retirement. Brokerage accounts enable investing in stocks, bonds and mutual funds.

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    1.types of Bank Accounts

    Uploaded by

    Louie Lontiong
    11 views8 pages
    Checking accounts provide easy access to deposited funds with no minimum balance but can incur fees if overdrawn. Savings accounts earn interest but have restrictions on withdrawals and usually require a minimum balance. Money market accounts combine aspects of savings and checking accounts, offering higher interest than savings and limited check/debit access. Certificates of deposit (CDs) provide a fixed-rate, low-risk way to invest for a set time period but have early withdrawal fees. Individual retirement arrangements (IRAs) allow tax-favored saving for retirement. Brokerage accounts enable investing in stocks, bonds and mutual funds.

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    1.Types of Bank Accounts

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    Checking accounts provide easy access to deposited funds with no minimum balance but can incur fees if overdrawn. Savings accounts earn interest but have restrictions on withdrawals and usually require a minimum balance. Money market accounts combine aspects of savings and checking accounts, offering higher interest than savings and limited check/debit access. Certificates of deposit (CDs) provide a fixed-rate, low-risk way to invest for a set time period but have early withdrawal fees. Individual retirement arrangements (IRAs) allow tax-favored saving for retirement. Brokerage accounts enable investing in stocks, bonds and mutual funds.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    11 views8 pages

    1.types of Bank Accounts

    Uploaded by

    Louie Lontiong
    Checking accounts provide easy access to deposited funds with no minimum balance but can incur fees if overdrawn. Savings accounts earn interest but have restrictions on withdrawals and usually require a minimum balance. Money market accounts combine aspects of savings and checking accounts, offering higher interest than savings and limited check/debit access. Certificates of deposit (CDs) provide a fixed-rate, low-risk way to invest for a set time period but have early withdrawal fees. Individual retirement arrangements (IRAs) allow tax-favored saving for retirement. Brokerage accounts enable investing in stocks, bonds and mutual funds.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    TYPES OF BANK ACCOUNTS

    Checking accounts

    Checking accounts allow you to have easy, day-to-


    day access to the money you deposit into them. There
    are usually no minimum account balances required —
    you just have to keep enough money in your account to
    cover your purchases. This is important to avoid
    overdrawing your account. Overdrawing your account
    means that you’ve spent more than you have in the
    checking account, and your bank pays the full amount
    of your purchase. When you overdraw your account,
    you almost always have to pay fees.
    Savings accounts
    Savings accounts allow you to earn interest on the
    money you deposit. But as the name suggests, these
    accounts are meant for saving money. So there is a
    restriction on the number of certain types of
    withdrawals or transfers you can make in a month and
    usually a daily minimum balance requirement.
    Earning interest sounds great — who wouldn’t want
    to earn money just for having money? Keep in mind,
    though, that the interest your account
    earns is considered income and is therefore taxable.
    Money market accounts
    A money market account is a cross between a
    savings and checking account. Banks typically offer a
    higher interest rate on money market accounts than on
    savings accounts, and can also give you limited
    monthly access to your money via checks and a debit
    card. You can only make up to six withdrawals or
    transfers of a certain type from a money market
    account per month — and, fortunately, just like savings
    accounts, neither ATM nor in-person withdrawals or
    transfers count toward the six-withdrawal limit. The
    interest rate you earn can depend on the amount you
    have deposited.
    Certificates of deposit (CDs)
    Certificates of deposit can be a low-risk way to invest
    your money for a specified period of time at either a fixed
    or variable interest rate. CDs are considered low risk
    because if you get one with a fixed interest rate, you’re
    guaranteed to earn that percentage rate on your deposit
    until your CD matures. Typically, CDs with longer periods
    offer higher interest rates. That means a CD that matures
    in five years will typically earn interest at a higher rate
    than a CD maturing in two years. CDs are often attractive
    savings tools because they typically earn higher interest
    rates than a traditional savings account. One thing to keep
    in mind is that CDs have early withdrawal fees. If you
    withdraw money from the CD before it matures, the fees
    can be expensive.
    Individual retirement arrangements (IRAs)
    An individual retirement arrangement (also known
    as an individual retirement account) is a savings tool
    the IRS created as a way to give people an easy avenue
    to save for retirement.

    a tax-favored personal savings arrangement, which


    allows you to set aside money for retirement.
    Brokerage accounts

    Brokerage accounts give you another way to invest


    your money. With a brokerage account, you can invest
    in stocks and bonds. You can earn money buying
    stocks if you sell them at a price that’s higher than
    when you bought them. You can also earn dividend
    payments, which is when a company distributes some
    of its earnings to shareholders.
    Account type Why you might want it
    You want unlimited access to your
    Checking account money and you’re not concerned
    with earning interest.
    You don’t need constant access to
    this money and can afford to leave it
    Savings account
    in a secure account where it will
    earn nominal interest.
    You want a blend between a
    checking and savings account and
    Money market account
    only need limited access to this
    money each month.
    You want a secure way to invest
    Certificate of deposit (CD)
    your money for a set period of time.
    You want a tax-deductible or tax-
    Individual retirement arrangement (I deferred way to invest your money
    RA) for retirement.

    You want buy and sell securities like


    Brokerage account
    stocks, bonds and mutual funds.

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