Checking accounts allow you to deposit your money and have easy access with debit cards and written checks. However, if you want to improve your financial situation, consider putting at least part of your money in a high interest savings account. These allow you to increase your monetary output and also help you learn how to compare banking rates.
To help you further understand savings accounts, here are some of the most common types found in Memphis, Tennessee.
- Regular savings - Also called passbook accounts, these accounts allow monthly deposits with a changing, usually low interest rate. They are easy to access, have no minimum amount, and do not charge withdrawal fees.
- Online accounts – Exclusively online, these accounts offer the same services as regular savings, but usually offer slightly higher interest rates. Make sure the bank is FDIC approved. If you feel comfortable banking online, definitely consider this option.
- Money market – These offer higher interest rates but require a larger balance in the account. More limited access to your funds could create issues.
- Certificate of deposit - If you have a chunk of money you do not plan on using for a while, consider a CD. These timed deposits offer higher fixed interest rates for putting your investment away for a longer time. Early withdrawals can come with fees.
- Christmas club savings -Although not all banks offer these, Christmas club accounts offer a better way to go shopping for the holidays. You open an account in January and withdraw the money in November. Setting up monthly deposits from your paycheck can make Christmas shopping much easier.
- Goal setter – For the person with diverse needs, goal setter accounts provide the answer. You can name these accounts yourself and open as many as you like. These are useful for setting up a college fund or vacation account.
