Two main types of accounts can be differentiated - personal and business savings accounts. The first variety is suited to the needs of individual clients while the second is a good option for business owners. A personal savings account can be held by one or more persons, with depositors accessing their accounts at any time, though not all financial institutions allow this. Many such accounts go with a minimum balance requirement and fees are thus avoided.
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Another variation of the savings account is the money market account. Holders of money market accounts can use checks on a monthly basis. These accounts are offered by banks and credit unions, with many of the features of regular savings accounts. While money market accounts pay higher interest rate, they usually go with a higher minimum balance. In many cases, the minimum balance is in the range $1,000 - $2,500. The minimum balance is lower with regular savings accounts, between $25 and $100. Exception is made for children, because this account type is often the first that parents open for them. Most financial establishments are quite accommodating to children, as this is one way to develop their future customer base.
Depositors who open a personal savings account can make three to six withdrawals and white up to three checks a month.
In addition to regular savings accounts, some financial entities feature online-only savings accounts. Customers benefit from higher interest rates and security restrictions may be higher as well. Banks pay high interest rates with online-only savings accounts, but they benefit from amassing deposits. Regardless of the fact that deposits are liabilities for financial institutions, and depositors can withdraw them any time, deposits are used to make more loans. These are considered bank assets because the interest charged on them generates revenue.
When are personal savings accounts a good option? Some bank customers prefer interest checking accounts, which pay lower interest compared to a savings account. At the same time, a savings account is a better option if you won't need the money over a period of several months. If you will not be able to maintain the minimum balance, you should not open a savings account because you will not benefit from the interest earned.
When you choose a savings account, you should take several factors into account. Ask about the fees and service charges first. Second, find out the minimum balance requirement, as you will be charged a fee if you do not keep certain money in your savings account. Finally, you should look at the interest rate you will be paid on your balance.
If you are interested in savings accounts, visit this guide to get more information - http://www.yourloan.ca/
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