Selecting a bank account is a crucial step in achieving your financial goals. There are many bank accounts out there but as a client, the best account should have low fees, high brazil bank deposit rates and lenient policy when it comes to overdraft. To choose the right bank account, it is essential that you understand the types of bank accounts.
Here are the types of bank accounts:
Bank checking accounts
Checking account is utilised for everyday banking like depositing paycheck, withdrawing cash and even paying bills. It offers different ways to access your money like ATMs, debit cards and personal checks. Checking account will not restrict your number of monthly transactions. Basically, this is the type that you interact with most often.
You should first determine whether the checking account offers interest. However, your money will not sit there long enough to avail the interest. With this, you should look for an account that does not charge a monthly maintenance fee and it does not require a minimum balance.
When you search for a checking account, you need to remember that big commercial banks are the most convenient because they have advanced technology and many branches. However, if you are looking for a more personalised service, credit unions and smaller banks may be the best choice.
Bank savings accounts
A savings account will basically provide you with a safe place to store your money. Accessing the fund is not a problem because you can quickly access it in the event of an emergency. However, this type of account may limit the number of transactions you can complete every month.
You have to know though that savings account earns little interest. The average rate for a savings account is about 0.06%. You will be lucky to find a savings account that offers high rates of more than 1%. It is prudent to look for savings account offering the best rate.
Money market account
Money market accounts come with the debit card and checks. Like a savings account, it may limit the number of transactions you can complete every month. For this account, it offers slightly higher interest rates compared to a savings account but it has a higher minimum balance. The best thing to do is to compare the money market account rates with the savings account. Go for the account the offer low fees but best rate.
Certificate of Deposit (CD)
CD refers to a timed deposit. This is when you promise to leave your money for a period of time. It is typically from a few months to five years. In return, the bank will offer higher interest rates. Remember that the longer the term, the higher will be the rate.
Look for a bank that offers the right terms. It is important that you are comfortable with the agreement because withdrawing before the end of the agreed term will lead to a costly penalty. If you consider CD, at least look for a rate higher than 1%. If you cannot find, it is better to put your money in a high-yield savings account that will allow you to access it at any time.
Whether you put your money short term or long term, how and where you do your banking makes a difference. Do not settle for a bank that is closest to where you live or work. If their terms are not great, it is time that you shop around.
