My neighbor gushed in yelling about the commercial of a bank which is offering free bank account! It sounds like a great idea but before you go sign up for that account and start banking with any specific bank you should know that bank accounts are not one size fits all. When you understand the different types of bank accounts you can actually make your money work for you in the best possible way.Different Types of Bank AccountsMy experience suggests that it is the checking account that is usually offered on those commercials. These are the most common type of bank account as they allow you to withdraw money from your account by writing checks and with a debit card. These accounts serve as a great choice. This is because it helps to access money without having to jump through hoops or wait for a check to be cut, etc. Some checking accounts pay interest, allowing you to take advantage of average daily balances, but most typical checking accounts, also known as a demand deposit account, will not pay interest.Money market accounts offer interest on the accounts as well as allows you to write checks on it. A money market account allows for you to benefit from a higher rate of interest than your typical savings or checking account, but they do require that you have a higher minimum balance than you would have to have with other accounts. May be withdrawing funds from these accounts is not as simple as with a checking account but you can still write checks here. In addition, there are usually more fees associated with this type of account, making it a good option for those that don’t necessarily need to access the cash.Another commonly known type of account is the savings account. This is the type of account that most people use to keep the bulk of their money in. One can capitalize through the interest offered on these accounts but he cannot write checks from these accounts. You may be limited as to the number of withdrawals or transfers that you are allowed to make each month and if you go over you may be charged a small fee.Besides these, there are time deposit accounts, or certification of deposits or CDs. These accounts offer guaranteed interest rates and allow for the account holder to choose how long they would like their money to be on deposit, you can generally choose anywhere from a few days to a few years. This account is not fit for people who wish to access their money. On the contrary it is a great option for those you want to earn a high rate of interest on a specific amount of money.As you can see, there are many different account types for you to choose from. Multiple options provided by the bank should be discussed before you finally decides on one. If you still aren’t sure let them know what you will be using your account for and they will likely be able to help you make the right choice for your financial needs.
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