If you want a safe place to keep your savings and want to earn a bit of interest back, then a savings account or CD account is a good idea. The only problem you might face is choosing the correct type of account for your needs and the right bank. There are quite a few different types of savings account offers to choose from online.
Regardless of which account you choose, remember that savings accounts work differently than your typical checking account from the bank. First, you will have limited access to the money. You may only be allowed to use the account for transfers, withdrawals, or purchases a few times a month. Going over that limit will result in a penalty. For this reason, think carefully about the amount you want to set aside – especially if you’re going to put it in a certificate of deposit account, as this will lock your money in for a set period.
Liquidity refers to how much allowable access you’ll have to your money. It varies depending on the types of savings account. Traditional savings accounts usually have more liquidity than CD account. Some banks allow for transfers to and from checking accounts.
When deciding on a bank, always look into details such as the introductory period for the APY % and the Evaluation Period, which usually begins towards the end of the month following the month of your account opening. After that, you’ll likely be required to make another deposit of a certain amount to qualify for a higher rate.
Money Market Accounts at banks are also types of savings account options (kind of). However, they are not quite the same as regular savings or regular checking account but have characteristics of both. So, for example, you’ll be allowed to make more transactions and purchases with a money market account, similarly as you would with a checking account.
Types of Savings Account That Require a Minimum Deposit
Banks require that you meet a minimum deposit requirement for this account and the interest rate and APY %. However, as long as you meet the needs and don’t incur any penalties, there are plenty of advantages to having a money market account. The money is FDIC-insured and more flexible than a savings or certificate of deposit account.
When choosing a bank, look over their options for savings and what terms are. What is the evaluation period? How about the introductory rate? What is the current APY%? How many transactions will you be allowed per month without getting a penalty? Are there any other fees, such as account maintenance? Ideally, choose an online bank that charges no unnecessary fees like account maintenance.
For the time being, one excellent bank to consider that has good, various types of savings account offers is CIT Bank. FDIC-backed has terms favorable to the consumer, good customer service, and no unnecessary fees.