Understanding Different Kinds of Bank Accounts | Cleveland Bradley County Teachers Federal Credit

If you have been adulting for long, or at least pretending to adult for a while, then you probably have at least one banking account. In the age of direct deposits, it can be hard to go without a checking account.

How much do you understand about the different types of accounts, though? When was the last time you looked at interest rates, long-term costs and the other terms that come along with keeping money in the bank?

Getting to know your bank accounts can help you reach your financial goals faster. Making sure your money is in the right account for you is crucial so that you have the access you want—or don’t want.

The Most Common Kinds of Accounts

There are four kinds of accounts that are most common and typically offered at any bank or credit union. These accounts all operate a little differently but still offer you accessibility to your money with a little interest earned on the side.

1. Checking Account. You are probably most familiar with checking accounts, but did you know there is a lot you can do with them? You may already have your paycheck direct-deposited into your checking account, but you can also set up automatic bill pay so that your regular bills are handled without ever having to think about them. And if you are still saying “well, everybody knows that,” maybe you didn’t know that most budgeting apps can be linked to your checking account so that you see your budget updated in real-time.

2. Savings Account. Linked together, your checking and savings accounts should be the best of friends. It is ideal to have money automatically moved into savings every month. Even a dollar or two will make a big difference. The money in your savings account should be less accessible than what is in your checking account so that you are earning interest.

3. Money Market Account. These accounts act like a hybrid between a checking and savings account. While you can make transfers and withdrawals from these accounts, they are typically limited to a certain number per month. These kinds of accounts could be ideal for someone whose income consists of a lot of cash.

4. Certificate of Deposits. CDs are not as popular as they used to be, but they can still be a viable way to put some money aside. These typically come with a maturity date, which means if you need the funds before that date has hit, you could end up losing some of your money in fees.

The Right One for You

Finding the right account for you is going to depend on a lot of variables.

How often do you need to access your funds, and how often will you be making large withdrawals? Do you hope to earn interest on money you have set aside for the long-term? It’s likely that finding a mixture of these accounts will be the best way to meet all of your needs.

The best way to secure your financial future is to talk with a banker. We love to sit and discuss the different options that are available to you and make sure you fully understand each one. We work hard to get your money where it needs to be so that you can rest easy.

Ready to discuss how to secure your financial future with the right accounts? Contact us to get started.