A bank account records and maintains the transactions between an individual and a financial institution. People use bank accounts to store money, whether they need a general place to keep all their financial records or just want to save up money for a special occasion or item. Bank accounts also make budgeting much easier, since your financial transactions remain in one place.
There are many types of bank accounts, the most common bank accounts being:
- Money Market
- Certificate of Deposit
- Overdraft Protection
Most people start out by opening a checking and savings account. A checking account, in the simplest terms, stores your money in an active account, allowing you to pay for things, deposit and withdraw money. Banks and other financial institutions generally don’t impose too many limits for checking accounts, making them the simplest bank account to open. A checking account is typically linked to a debit card, which allows most to immediately pay for many things.
Savings accounts let people save money, as long as they deposit their funds into the mostly passive account. You can withdraw and deposit money into a savings account, however you can’t use a saving account to pay for items using a debit card.
Before even opening a checking and savings account, you should research the various banks and financial institutions out there to get an idea of the type of policies you want to follow. If you travel a lot, you’re better off using more prolific banks for convenience, rather than a smaller one.
When shopping checking and savings accounts, you may need to check the minimum requirements for that particular account. This means that many banks charge a monthly maintenance fee that corresponds with your monthly minimum balance. If you can’t afford a monthly maintenance fee, you should choose a bank that omits it all together.
Don’t forget to check up on a bank’s policies to find what other fees you need to pay, as well as overdraft options in the case of you overdrawing funds. In closing, you should choose a bank for financial institution bank with the most attractive bank account options for your lifestyle.