Savings account the basics of saving
Saving accounts are those which are kept in banks for which you can earn a monthly interest. The primary reason to have savings account is that it allows the consumers to have a separate option to park their liquid assets while earning some interests on the same. However, the more important reason for maintaining a savings account is to initiate the habit of saving money. It is also known to encourage the consumers to make their money work and to use it for the correct reasons. The money can be withdrawn according to the convenience of the consumer wherein a quarterly or monthly average balance has to be maintained which keeps changing with the regulation of each bank. The savings account is one of the options which survived the ravaging attack of debts. As a matter of fact, the minimum eligibility for securing pay day loans also requires an individual to have a bank account where the money gets credited. Although the pay day loan debts have remained as a source of perennial problem since the recession, it has not stopped the consumers from securing one. Coming back to the savings account, there are various types of these accounts and one of the major issues that we should remember is the yield that you can get on the money that is kept. The interest amount which the bank pays to the consumer in lieu of the savings account is termed as the Annual Percentage Yield. The money that the bank holds is used to provide loans to others. The rates for the loans are regulated by the Federal funds Rate. The current levels of yields are low owing to the decline of the Federal rates. However, the bank will loan the money at a significantly higher rate to earn profits.
Among the most commonly known savings account is the traditional one which is provided by every bank around the corner and provides the lowest yield. However, there are no minimum requirements in order to have these accounts and usually no fees are charged for the same. Followed by this, there is one called as the money market account which will allow the consumer to issue checks. In this case however, the consumer will require having a minimum balance. The online savings accounts have gained much popularity owing to the financial crisis when the other places provided very little interest. In addition to this, there are high yielding online savings accounts which will provide even better rates of interest but you will require having a high deposit in order to get the best rates which are as high as 3%.
The procedure for opening a savings account is fairly easy. Any individual who is 18 years of age can open a savings account with the help of some basic identification. Some of the banks may ask you to have a checking account alongside. As far as choosing s bank is concerned, you must ensure that the financial institution is insured by FDIC.
Bestdebtcare is an author of finance and also written several financial journals related to a wide variety of topics from banking to debt relief. She has also published books on money management in general and recently on free debt consolidation help and the best debt settlement program.
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