When it comes to finding a safe place to put your money, there are a lot of options. Savings accounts, checking accounts, certificates of deposit and money market accounts are popular choices. Each has different rules and benefits that fit different needs. When choosing the one that is right for you, consider:
- Minimum deposit requirements-
- Limits on withdrawals-
- Interest- How much (if anything) is paid and when: Daily, monthly, quarterly, yearly?
- Deposit insurance- Make sure your bank is a member of the FDIC. This organization protects the money in your checking and savings accounts, certificates of deposit and IRA accounts up to $250,000.
- Credit unions- A credit union is a nonprofit, cooperative financial institution owned and run by its members. Like the FDIC does for banks, the National Credit Union Share Insurance Fundor (NCUIF) insures a person's savings up to $250,000.
If you are considering a checking account or another type of account with check-writing privileges, add these items to your list of things to think about:
Number of checks- Is there a maximum number of checks you can write per month without incurring a charge?
Account and check fees- Is there a monthly fee for the account or a charge for each check you write?
Holds on checks- Is there a waiting period for checks to clear before you can withdraw the money from your account?
Overdrafts- If you write a check for more money than you have in your account, what happens? You may be able to link your checking account to a savings account to protect yourself.
Bounced checks- It's your responsibility to have sufficient funds in your account to cover checks that you write. Your bank will charge you for insufficient funds. Bounced checks can also blemish your credit record, so you may want to talk to your bank about overdraft protection.
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