Imagine a banquet table with an array of different dishes.
You can opt for one particular salad or fill your plate with
a variety of tastes. The same is true of today's bank accounts,
because there are plenty from which to choose.
Just like it sounds, this account allows you to write checks
against the balance you hold in your account, as well as access
your money through an automatic teller machine (ATM). It is
a functional account best used for everyday expenses and not
for long-term savings, as it doesn't earn the highest interest
rates available from bank accounts. Most banks offer a myriad
of checking accounts from which to choose.
Savings accounts offer fewer variations than in the checking
arena, and tend to require a low minimum balance. Most people
open a savings account at the same bank as they do their checking,
for the sake of convenience, but feel free to shop around
for a higher-interest bearing account.
Money market accounts earn a higher rate of return than most
savings accounts, sometimes as much as double the interest.
The minimum balances are generally higher--$500 to $1,500--with
certain withdrawal restrictions.
CDs offer higher interest rates than general checking, savings,
and money market accounts. In fact, they are the highest interest
bearing accounts you can invest in and still get an FDIC insurance
guarantee that your money is safe. However, CDs pose some
liquidity restrictions.
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Types
of Accounts
