There are three options available in the types of Savings accounts. These options are a regular savings account, money market account, or certificate of deposit.
A regular savings account is one where you can earn interest and get quick access to the funds. A money market account also allows you to earn interest and provide quick ATM access. Certificate of deposit accounts usually consists of a high savings account interest rate but have limited access to funds. In this article, we will explain every type of savings account and conclude on the best one to stow your cash.
Regular savings account
This type of account helps the account holder to earn interest and get quick access to the funds.
- Minimum balance and interest rates: This type of high-yield savings account provides around the 0.50% APY with no monthly fees and minimum balance requirements.
- Account access: You can easily access your money anytime if you have a regular savings account. Along with this, withdrawals and online transactions may be restricted to six times per month.
- What to know: If you want to access your money every day, you have to spend more than your maximum APY needs.
Money market accounts
Money market accounts are that type of digital savings accounts that have higher balance requirements and also need some check writing privileges.
- Minimum balance and interest rates: Money market accounts possess the same interest rates as the regular savings account, but they are required to maintain a minimum monthly balance to avoid the monthly fees.
- Account access: This type of savings account usually has the same option for withdrawals as the regular savings account but also comes with cheque book and debit cards. They only offer you six-time withdrawals of money in a month.
- What to know: Similar to savings accounts, money market accounts are insured to protect your money. They vary from the similar sounding products that are involved in the investments.
Certificates of the deposits
This savings account carries the top interest rates, but they provide limited access to the funds.
- Interest rates and minimum balance: certificate of deposits pay the top interest rate for the three kinds of savings accounts. There is no requirement for the minimum balance in it.
- Access of account: With the access of typical CD accounts, when you agree not to withdraw the money for a fixed time is known as the term. Under the same case, if you withdraw the money before a fixed time, you have to pay the withdrawal fee earlier.
- What to know: The terms of a CD account typically vary from six months to five years. The longer the CD terms, the better you get the interest rates.
This article consists of every important fact related to the basic three types of savings accounts. If you are confused about choosing the best option to stow your money, then you have to read all facts about the above types and then choose the best one for you according to your requirements.