Types of Bank Accounts
Types of Bank Accounts
There are many questions related to the economy when one is barely starting to live life. How does one file taxes, where do you pay bills, etc? There are also many questions related to banks. Banks are made to put ones money into it to keep it safe or to save it and earn interest. There are many accounts that one could put it in, such as savings or checking. There are many that may wonder when they get married, do they keep their money separate or do they join it together? Well, there are simple answers for that.
One of the main bank account is savings. A savings account is a type of account designed to simply hold money that you do not need immediate access to. It’s also a safe place to keep money in if you do not want to keep it at home where it might get lost or stolen pretty easily. In contrast with checking accounts, savings accounts tend to pay a slightly higher rate. When having money in a savings account, it earns a small amount of interest and therefore, they pay you more money than checking accounts. Your bank savings account pays a rate of return on all the money in the account (you’re APY). What is APY? APY stands for annual percentage yield, which is a tool for evaluating how much a deposit earns you. That means that you get "paid" for keeping your money in the account. How do you open up a savings account? Well all you have to do is go to a local bank and ask if you could open up a savings account. You will need identification and also tell them how much you want to deposit. Then ask how much interest you’ll earn and you have your own savings account.
The second main account is a checking account. Checking accounts are the place to keep the money you'll be using soon. There is a different checking account such as Interest Checking where it allows you to earn interest on accessible cash. It’s like a mix between checking and savings account. Checking accounts also allows you to use checks and a debit card, which is tied to your account. You could also take out cash with your debit card in the ATM. The down side of this is that you don’t earn interest. A good advice is that you also don’t put all your money into a bank.
A way to open a checking account is to go to a bank and ask to open one. You have to bring two forms of identification and at least one hundred dollars to deposit into your account. Then they ask you to type a four digit code that only you know. That is called a PIN. Later on they mail your debit card and you’re done. There are also many offers that many banks have. For example, Chase offers you $100 if you use your debit card five times. Banks may offer free checking as a way to save consumer money. They usually require that you make a small deposit in order to open the account, and you qualify for free checking. This usually means that there is no annual fee on a free checking account. Some banks also offer free checks for life with free checking.
When you are married, you have a choice in either to have a separate account or a joint account. If you decide to maintain separate accounts, you can each deposit your pay into your personal account and transfer a pre-agreed sum each month to a joint checking account that is used for household expenses such as food, mortgage, insurance, utilities and maintenance, etc. Many couples keep separate accounts at first, and then opt for a joint account when they have children. Joint accounts are when couples merge their money. With joint bank accounts, both partners have all of their money deposited into one single account and all household bills and expenses are paid from this account. This account will also hold all entertainment money and general household funds. Joint accounts are when couples merge their money. Joint accounts are not only for married couple. Any individual who is a member of the joint account can withdraw from the account and deposit to it. Usually, joint accounts are shared between close relatives or business partners.
There are many accounts and these are not the only ones. These were some of the basic accounts that banks have and are the easiest to access to. All you need to do is investigate and make a choice in which bank you want to put it in. There are always many other options that you could have and this is one these are one of them.