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Bank Accounts Explained

If you have finally decided to open a new bank account it is very important to choose a bank that would suit your needs the best.

Normally, people have two accounts: a savings account and a checking account. Anyone can have a savings account, and it is mainly used for that: saving. When you deposit money into this account it will accumulate interest every month depending on the interest rate. The saving account interest rate will never usually go above 1.5%, so if you were already scheming to make money off of banks do not get your hopes up too high. Also, in order to own a savings account you must always keep a certain amount of money in that account and that money can only be recovered when you decide to close the account. All money deposited in this account is insured, so it is a very safe place to keep your extra money.

The other type of account that is almost universal is a checking account. In order to own a checking account you must be at least 18 years of age. Checking accounts, unlike savings accounts, do not earn any interest and are mostly used for convenience. Nowadays when you open a checking account you are usually given a debit card which can be used in all places that accept debit cards. It is much more convenient to carry around a card, that requires a four digit pin to be used, rather than carrying around a load of cash. All money that you deposit into a checking account is meant for near immediate use, and can be accessed through an ATM, online purchases, and a variety of locations such as gas stations and restaurants. It is also a lot safer to carry around a debit card because if lost or stolen, in order for someone else to have access to your funds they must know your four digit pin.

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