Types of bank accounts

Erin O'Neil has more than a decade of experience working as a writer, editor, content manager, and more for a variety of websites, including Wise Bread and Cumulus Media. She began her career as a financial analyst for a wealth management firm before becoming an expert writer on banking and finance. Erin graduated from Georgia State University with a bachelor's degree in English and economics. • Good for: A first bank account for kids or teens or an account for adults looking for a place to earn interest on savings or park cash they would otherwise be tempted to spend • Drawbacks: Savings accounts often yield a lower interest rate than money market accounts and CDs. They don't come with a debit card for purchases (however, if your savings account is at the same financial institution as your checking account, you could use your debit card for ATM withdrawals from your savings account if your bank permits it). Moreover, banks have traditionally limited consumers to no more than six withdrawals per month from these accounts. Although the regulation requiring withdrawal restriction was lifted in April 2020, some banks still limit withdrawal in their policies, so check with your bank for the latest rules.  Savings Account Tips • If local banks or credit unions are too expensive, look at online-only options. Online savings accounts often pay the most interest and charge the lowest fees. • To build up your savings account, drop a lump sum of cash into an account to sta...

Bank accounts are useful tools that can help you manage your finances. The varied types of accounts allow you to save and keep track of spending, and some will even earn you more money in the form of interest. If you’re interested in opening a bank account, you must decide among several different kinds and familiarize yourself with the rules for each. By being informed, you can determine which accounts best meet your lifestyle and goals. Most banks offer four types of accounts: Account Type Why you may want it Checking You want access to your money at any time and are OK with earning minimal to no interest. Savings You don’t need access to your money often and would like to leave it in a secure account that earns some interest. Money market You want a mix between a checking and savings account and only need occasional access to your money. Certificate of deposit You want to invest money that doesn’t need to be accessed for a specified amount of time and earn a fixed rate. Checking accounts A Some checking accounts charge fees for maintenance, ATM withdrawals and minimum balance violations. Comparing options can help you find a Good for: • Everyday spending and bill payments. • Frequent deposits, such as paychecks. Bad for: • Consumers who want to earn interest on their money. • Spending more than what you have immediately available, since it may incur Savings accounts A Savings accounts vary in interest rates, method of compounding interest, service fees and minimum openin...

Choosing the right bank for your money is only half the battle. Once you've settled on that, you have to decide which types of bank accounts you're going to use. There are four main options you'll come across -- checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs) -- and each of them are discussed in detail below. Rating image, 4.50 out of 5 stars. Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor 4.50/5 Rating image, 4.75 out of 5 stars. Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor 4.75/5 Rating image, 4.00 out of 5 stars. Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that del...

Advertiser Disclosure Close We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials. Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates. Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can. Some people think banks just offer checking and savings accounts, but there are actually other types of bank accounts that financial institutions commonly offer. There are lots of things you can do with your money: You could deposit all of it into a checking account so you can spend and make deposits easily and often; you could split your money among different types of accounts to earn interest or dividends from investments; or you could cash your paychecks and store your money under your mattress (we don’t recommend that last option). Here are six common types of bank accounts and how to use them. Keep in mind that accounts can come with all sorts of fees, so be sure to...

Not every type of bank account is created equal. Some may not require a minimum balance or charge fees—win! While others may penalize you if you take money out at the wrong time. Basic checking and savings accounts are a great starting place for everybody. And then from there, you can branch out into different types of bank accounts where your money can really start to add up. 1. Checking Account The most basic type of bank account is the Checking accounts, which you can set up at a traditional or online bank, come with a debit card. It works a lot like cash. But now you don’t have to carry around a pocketful of money. It can go in your checking account instead. Then when you go to the grocery store or gas station, you can swipe your debit card. The amount is usually deducted from your checking account right on the spot. Depending on the vendor, some transactions may take a couple of days to process. In that case, you want to make sure you don’t double spend that money. More on that in a second! A checking account also makes budgeting and bill-paying a breeze. When you set up automatic bill pay, payments are deducted straight from your checking account when they’re due. No more scrounging up a stamp and envelope to mail in your mortgage payment or forgetting to pay the light bill. And when you use a budgeting app, you can connect your Features to Look for in a Checking Account • No minimum balance required to set up or maintain • Direct deposit • Online banking through you...

Savings Account Basics When opening a savings account, you should know that it is another type of deposit account that lets you earn interest on the money you keep at the bank. Savings accounts have withdrawal limits and are often used for a financial goal or a specific purpose. You might find them helpful when saving for a major purchase or keeping an emergency fund. A Better Way to Bank Here are some key takeaways: • High-interest • Your paycheck can also be directly deposited to a savings account, but since a savings account is designed to do just that — save your money — it isn’t your best option for frequent transactions. • Many banks limit the number of free transactions savings account holders can make each month and charge a fee for exceeding that benchmark. • Some savings accounts come with monthly service fees or monthly maintenance fees. Checking vs. Savings Accounts: What’s Better? Checking and savings accounts are designed to meet different financial needs, so the “better” account is the one that best helps you achieve what you need to do with your money. Many may wonder “Is my money safer in a checking or savings account?” Both can carry FDIC insurance protection of up to $250,000, so a savings account isn’t any safer than a checking account — or the opposite. Many people have A Better Way to Bank Checking vs. Savings Accounts Breakdown Checking Savings Features Typically includes a debit or ATM card May come with an ATM card Limits No w...

Bank accounts offer convenience, safety and security for your money. Whether you bank online or prefer a traditional bank or credit union, there are numerous account options from which to choose. Different types of bank accounts can serve different purposes, depending on your needs. Some allow you to spend or pay bills, while others are designed for short- or long-term savings. The most common types of bank accounts include: • Checking accounts • Savings accounts • Money market accounts (MMAs) • Certificate of deposit accounts (CDs) Understanding how the different types of bank accounts compare can make it easier to decide where to keep your money. Checking Account Basics A Here are some of the key features of checking accounts in general: • Designed to hold funds you plan to spend or use to pay bills • Typically come with a debit card for making purchases or cash withdrawals • May come with paper checks as well • Can be linked to other types of bank accounts, including savings accounts It’s important to note that checking accounts aren’t all alike in terms of the features or benefits they offer. Banks can offer multiple • Kids or teen checking • Student checking • Senior checking • Interest checking • Rewards checking A basic checking account is generally the most common option you’ll find. With a basic checking account, you may be able to spend using a debit card, pay bills online or via paper check and transfer funds to or from linked accounts. Basic or standard checkin...