Understanding Different Types of Bank Accounts

What Are the Different Types of Bank Accounts

Bank accounts are used to deposit, save and track your money. There are different types of bank accounts which will give you different types of interest. The money in your bank is always safe and secure unlike the money kept in your wallet.

While opening a bank account, it is always good to understand the different types of bank accounts so that you choose the ones that meet all your requirements.

 

Types of Bank Account:

There are four different types of bank account in general and let’s discuss them in two different groups.

The two main types of bank accounts are savings or current account. We’ll describe them completely below:

Savings Account:

A savings account is basically for saving your money. You can open this type of bank account either individually or jointly with someone. Savings account are usually opened by students, pensioners, salaried or professional employees. There is a different interest rate, service rate with the savings account.

Once gets a debit card, net banking facility, SMS facility when he/she opens a saving account. It is mandatory to keep a minimum balance in the savings bank to keep this account functional.

Current Account:

The current account is opened by businesses, firms, companies for making their business transactions. They cannot use it for investment or saving purpose. This type of bank account doesn’t have any limit on withdrawal and deposition of the money and most of them are liquid depositions. Current account holder needs to pay a fixed amount of service fees for maintenance of the account.

 

There two other types of account apart from savings and current account which you may open to earn more interest:

Money Market Account:

There is a minimum requirement to open this kind of account as it yields more interest than a savings account. Most of the bank offer limited checks and withdrawal option. The rate of interest of this account is not constant as the name suggests, but these accounts pay you interest depending on the market conditions.

Certificates of Deposit:

A person can open this type of bank account when he wants to invest some amount of money in a safe place in order to get the interest in return. The money deposited in this type of bank account is not available for withdrawal for a specific period of time which may even be a few years. Open this account only when you are sure that you will not need this money for a specific period of time otherwise it may result in a loss through a penalty or loss of interest gained.

 

These are four different types of bank accounts which anyone can access by visiting a nearby bank of preference. It is very simple to open a bank account for your business or personal use. The bankers guide you very well while opening the account about the maintenance charges, service charges, withdrawal option, and using net banking.