Types of Bank Accounts

Choosing the right type of bank account is essential for achieving your financial goals. Common account types include:

• Checking Accounts:
  • Designed for everyday transactions like paying bills and withdrawing cash.
  • Features include debit cards, check-writing, and online bill payment.
  • Often have low or no interest earnings.
• Savings Accounts:
  • Designed for saving money over time.
  • Earns interest, which helps grow your balance gradually.
  • May have limitations on the number of monthly withdrawals.
• Certificates of Deposit (CDs):
  • Fixed-term deposits offering higher interest rates than regular savings accounts.
  • Funds are locked in for a specific period (e.g., 6 months, 1 year).
  • Penalties apply for early withdrawal.
• Money Market Accounts:
  • Combine features of savings and checking accounts.
  • Earn higher interest rates than standard savings accounts.
  • Typically require higher minimum balances.
• Retirement Accounts (e.g., IRA, 401(k)):
  • Specialized accounts for long-term savings with tax advantages.
  • Designed to help individuals save for retirement.