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Types of
Bank Accounts... Page 2
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4) Asset Management Accounts. Asset
management accounts are a type of checking account offered by many brokerage houses and
banks. They offer the convenience of one account to take care of all your banking and
investment needs. Asset management accounts normally provide unlimited check-writing
priveleges and a comprehensive end-of-year statement that documents all of your
transactions. Many financial institutions require a higher minimum balance to open an
asset management account. You should expect to pay an annual fee.
Savings
Banks typically offer two kinds of savings accounts: passbook and statement. Each pays
interest to encourage you to keep your money in the account. You're allowed to make
deposits or withdrawals with savings accounts, but you can't write checks. Savings
generally pay lower rates than money market accounts or CDs.
1) Passbook Savings. This is a traditional savings account. Transactions
occurring within the account (including interest deposits) are logged in a small booklet
that you keep. If you ever lose the booklet, you'll be charged a fee to replace it.
Passbook savings are generally offered by banks, savings and loans, and credit unions.
They offer a low interest rate and usually don't allow check-writing. Many charge minimum
balance fees.
2) Statement Savings. This type of savings account is similar to passbook
savings with one exception. Instead of a booklet, your bank mails you a statement
documenting all of your transactions. The statement usually arrives on a monthly or
quarterly basis depending on your bank. Statement savings accounts also charge minimum
balance fees.
Banking and Savings Calculators:
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• How much will my savings be
worth?
• How will taxes and
inflation affect my savings?
• How much difference will
the rate make?
• How much, at what rate,
when? |
