Everyone who wishes to save up for the future needs their own savings account. Not only is it safer than keeping your hard-earned money in a shoebox or a piggy bank, but it is also more convenient and accessible if ever you need cash for your groceries and other needs. While the average person may apply for a simple savings account, they may go through their whole life not realizing that there are other options.
Understandably, people do not want to be confused by the technicalities, so they usually stick with the average savings account for simplicity and practicality. What they do not know, however, is that the other account variants may also have advantages that may serve them in the long run.
If you happen to be one of those curious to know about these other types, look no further than the following information.
1. The Basic Savings Account
This may probably be what you have right now. While most banks are forgiving when it comes to their requirements, some of them will still ask you for a preliminary amount to open the account. This will vary depending on the bank, so pick one which will not ask so much from you.
You will also have to make sure that your savings don’t decrease beyond a certain point; otherwise, you will incur penalties or service fees that may reduce your savings further. The average savings account will also limit the amount you may withdraw within a day, so there are still instances when you may need to visit the bank to make more significant withdrawals.
2. The Money Market Account (MMA)
This type of savings account has a higher interest rate than the average one, but keep in mind that opening this also requires a higher preliminary deposit, charging you $1,000 upfront. The maintaining balance is also less forgiving, requiring a higher amount that will keep you on your toes to prevent penalties from being given out by the branch.
The good news is that MMAs give you more access and means to access your money. You may withdraw from an ATM just like any average savings account, and you will also have the choice to write a cheque, providing more accessibility to your funds.
3. The Certificate of Deposit
Experts say that, although this is the lesser-known type of savings account, this is also the most beneficial amongst the others. They have the highest interest rate compared to the first two, limiting your access to your funds. While the latter may sound like a disadvantage, keep in mind that this works for some who would like to prevent themselves from making unwise withdrawals.
Upon applying for one, you will have to choose the duration you may not access it, ranging from three to sixty months. After that, you are free to deposit as much as you want, but withdrawing any amount before the term ends will cause you to pay up an early withdrawal amount. This is perfect for people who may lack the self-control to use up their savings for unnecessary items.
These types of savings accounts may help you accumulate funds for future use or emergencies. While they may all have their pros and cons, you can still analyze your options and pick one that will work best for you.
Basic savings accounts are good, but their MMA and certificate variants are also beneficial in one way or the other. If you can’t make up your mind, try to apply for more than one variant and watch your savings grow over time—the more options you have, the more significant money you’ll be able to save. If you want to get the best savings account rates while keeping your money secure, allow Good Neighbors Credit Union to help. We offer various services ranging from savings and checking up to loans and online banking in Buffalo, NY. Get high-quality and stress-free banking alternatives—reach out to us today!