Types Of A Deposit Account In Banks
Everybody wants to save money for their future and so they would start depositing amount in their accounts. It is really a great thing because once we keep money with us, then automatically it will get reduces and so it is always better to drop it in an account. The banks can provide the interest for the amount the people put in and there is a wonderful chance for growing up the money. Every account holder has a doubt whether is it a safe thing to deposit the funds in the banks. Let us discuss the types of deposit accounts in banks and get a clarity about it in this article.
The savings account is the most well-known account we all often using. It is just a simple process to open a savings account and anyone can have this type of account to deposit funds. The account can be created with some unique ID proof and once opened, it is mandatory to maintain a minimum balance in their accounts. Else, their accounts will get closed automatically by the band members.
A checking account is nothing, but the electronic transfer of funds and the public can use their money through a paper check. But the only disadvantage here is there are many charges to pay by the payee like maintenance charges and more. When the persons do not manage their accounts properly, then they must pay a penalty amount.
Money market accounts:
The money market accounts are also a type of savings account but the interest rates are more here when compared with the savings account and the rates change based on the market rate changes and also the minimum balance to be maintained for this account is very high than the savings account type.
Certificate of deposit:
The certificate of deposit is truly an amazing way to deposit amount and even the banks give us more interest than the other extended savings account but the only problem here is the amount can be withdrawn only at the time of mature and the payees are not supposed to take any amount before the given matures time.
This type is similar to the CD account type, but this is especially for the long-term investment savings like retirement scheme.
Thus concluding that the deposit accounts above mentioned are not just for saving money and it is mainly to grow up the money because the banks usually use the deposited money to provide loans for the others and so it must give the users a reward like higher interest rates for the account holders.