Different Types of Bank Accounts

Different Types of Bank Accounts

Dave Ramsey says, “You must gain control over your money or the lack of it will forever control you”. Each of us has to manage the cash flow of his/her financial life as even uncontrolled nuances may cause big problems. In this article, you will find urgently essential information on different types of accounts that may be operated by financial institutions.

Checking Accounts

Basically, the checking account is used to be the "transactional account" of the customers. The main purpose of this account is deemed to be the daily purchases. If you do not want to physically keep your monthly salary, you are entitled to put them on your checking account. The checking account is also well-known as a current account with the intention of spending. The checking accounts are adopted to be used in the form of checks or debit cards.  This kind of money-keeping system is much more reliable than the cash version. In contrast to other types of accounts, the checking account holders are not obliged to pay the interest as they are using their own funds. However, there are some limitations such as the exact amount of checks or the exact amount of transactions per day. Thus, be extremely careful when you are signing the contract as unawareness does not cancel the obligations stipulated by the legal agreement.

Certificate of Deposit (CD)

The alternative way of saving money is regarded to be the certificate of deposit. Basically, it is something similar to a saving account with a big exception: when you are depositing funds you will not have access to them for a specific time period. The main reason why you cannot take your funds with the CD is the higher interest rate that the traditional lenders may suggest. In other words, you are depositing the funds without any permission to take them out until the end of the life of the certificate. If you are intending to use the Certificate of Deposit, firstly, you should consider the fact that your early withdrawal may cause tremendous penalties and fees, thus, you need proper management in order to eliminate probable financial problems.

Individual Retirement Accounts (IRA)

There are two types of Individual Retirement Accounts: Traditional IRA and Roth IRA. The traditional IRA allows depositing up to $4000 per annum (it is tax-deductible). However, in the case of Roth IRA, the deduction of the tax occurs during depositing the funds, thus, you clearly receive your funds at the end of the term.

Savings Accounts

The name of the saving account actually indicates the essence of what it has been designed. When you are putting funds in your savings account, it generates interest in your favor. In other words, if you have a deposit of $1000 with an annual interest rate of 5 percent, at the end of the year you will have $1050 in your account (deposited amount plus the interest rate). The interest rates, fees, and charges for service may vary depending on the bank and the state. Before choosing the exact bank you should deeply investigate the above-mentioned details for opening a saving account.

Money Market Accounts

In the case of the money market account, the financial institution requires to maintain an exact amount of funds in order to get started. The main difference between traditional saving and money market accounts is the potential fluctuation of the interest rates depending on the financial markets.

Why do I Need a Bank Account?

If you have a need of instant cash, in all probability, you will apply for online payday loans. However, the existence of a checking or savings account is one of the main requirements of online trustworthy direct lenders, as after submitting your credit application the funds will be credited to your account. Same-day loans are available in our connecting platform: Shinyloans.com. You can fill out an online application form and get confirmed for credits from $100 to $2500. You may check the availability of online payday loan lenders (through connecting platforms such as ours) by looking for e.g. Payday Loan Online Oklahoma or Payday Loan Online Oregon, or wherever you live. 

Essential Tips for borrowers

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