Home » Finance

What are the Types of Bank Accounts?

Nov 25, 2007
If you are new to banking, you may be surprised to learn that there are many types of bank accounts available. The type of bank account that you will need will depend on several factors. This article will examine some of the more common types of bank accounts that you will find at most banks and credit unions.

First, you should understand that not all banks and credit unions will offer the same types of accounts. Larger banks will usually offer the most services, but smaller banks are also usually well suited for most consumer needs.

The most popular bank account is the checking account. A checking account uses paper checks and/or electronic funds transfers as its primary means of business. When you open a checking account you will receive paper checks that you can use to pay bills and make purchases. Many checking accounts are free, but some may charge a small fee each month. With your checking account you may get access to ATM machines as well. The most important thing to remember about checking accounts is to not write checks that you cannot cover with the funds in your account. This is called bouncing a check and it can cost a lot of money in service charges and fees. It can also lead to criminal charges in some cases.

The savings account is the next most popular bank account type.
A savings account allows you to make deposits and withdrawals, just as a checking account does, however, savings accounts are not as flexible as checking accounts. Some savings accounts only allow a certain number of withdrawals per month. Normally, savings accounts do not include checks, so to get cash you have to visit the bank in person. Today, most banks to allow savings accounts to be accessed through ATM's for both deposits and withdrawals.

A third bank account is the money market accounts that some banks offer. A money market account pays higher interest on your deposits than a savings account but there are added restrictions as well. Often, these accounts will have a minimum balance that must be kept in order to earn the higher interest rate. Most accounts of this type also limit withdrawals to six a month. This type of account is used most effectively for cash that you do not think you will need to use soon.

Certificates of deposit are yet another type of bank account that some consumers find useful. These accounts should be thought of and treated as investments rather than money-moving accounts. CD's require you to make a deposit and to agree to leave the money in the account for a predetermined length of time. In exchange, the bank or credit union agrees to pays higher interest.

With a CD, you are required to keep the money in the CD bank account until the maturity date of the CD. If you take the money out early you are usually charged a penalty fee. In some cases, you may be allowed to withdraw the interest that has accrued without suffering a penalty, but you should check on this before assuming it to be true for all CD's.
About the Author
Peter Kenny is a writer for The Thrifty Scot, please visit us at Online Current Accounts and Refinance Loan
Visit http://www.thriftyscot.com
Rating:
Please Rate:
(Average: Not rated)
Views: 141
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources