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Major Types Of Bank Accounts


Checking Accounts
The checking account is an account type held at bank which provides frequent access to funds on demand with security. The account is also referred to as demand account or demand deposit accounts as it enables the depositor to draw checks that are payable on demand. It is actually used for regular use and is the best for frequent deposits and withdrawals. These accounts are generally free to open but a bank charges monthly fee if the average monthly balance drops below a definite amount. This account mostly earns you no interest.

Money Market Accounts

The Money market account is an interest-bearing account and is required for withdrawals with a relatively high rate of interest and short notice. If compared to checking or savings account, it pays a higher rate of interest. However, withdrawing funds from money market account is not that convenient as from checking account. The account requires higher minimum balance to start earning interest and every month you are limited to do six transfers to another account out of which only three can be by check. Most institutions also inflict fees on these accounts.

Savings Accounts

As the name suggests, savings account is the account type used for savings. One should open this account in a bank if one intends to keep your money for longer period of time. Banks for letting your money be parked will pay you a monthly interest. The account is not very user-friendly as the checking account because of limited number of withdrawals which enables you to do only few transactions per month. The account but let customers keep liquid assets while still earning a financial return.