Wednesday, April 8, 2009

Saving Money in a Bank

Author: George Wellington

The rewards for saving money in a bank are many. First and foremost there is the advantage of security. The money is safe from theft and in certain circumstances the money will be insured by the federal government if any problems befall the bank. Another benefit of saving money in a bank is the fact that many of the accounts available will earn interest on your money while you save.

The most common type of account is a savings account. The bank may require a minimum deposit or amount of money to be kept in the account but the bank will pay interest on that amount of money over a set time. The greatest disadvantage of a savings account is access to your money. Most savings accounts limit the number of withdrawals that can be made over a certain period of time. Frequently savings accounts will compound interest daily. This means that you are not only earning interest on the money placed into the savings account but you are earning interest on the interest that is being paid.

In contrast to a savings account for saving money in a bank, a checking account allows unlimited withdrawal from the balance but most checking accounts pay little or no interest. To combine the two many banks will offer a checking account that is tied to a savings account so that patrons may receive interest on part of their money but also have the ability to transfer money from their savings account if necessary to maintain the balance in their checking account.

A third type of account that allows you to save money in a bank is a money market account. Money market accounts allow the owner to save money at rates that are usually higher than savings accounts but the rate fluctuates with the market. Money market accounts usually have a higher minimum balance that checking or savings accounts. Also the number of withdrawals each month is limited usually to between three and six per month. Just as is done with savings accounts many people will tie a money market account to their checking account so that they can earn interest on money that they are unlike to need but retain the option of transferring it into their checking account if necessary.

Banks also provide both credit and debit cards for their customers who are saving money in that bank. A credit card allows the bearer to delay payment or charge a purchase of goods or services and pay for it later. A debit card pays for goods or services with money from the bearer's account, usually a checking account, at the time the purchase is made. These cards give the customer additional ways to save money in a bank by controlling went their money leaves the account.

Saving money in a bank with interest bearing savings accounts and money market accounts is both safe and effective. Bank accounts allow the customer to accumulate wealth and earn interest on that wealth while the bank backed by the federal government protects that investment. Banks also offer many ways for customers who are saving money to use that money easily.

About the Author:
Try a secure bank in Minnesota that provides personal and business banking solutions, including personal checking accounts, savings accounts, credit cards, and certificates of deposit.

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