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Many banks across the country offer various types of accounts. Sifting through those accounts and determining which is the most viable option for you is a key component in financial security and stability. Knowing what you'll get is a great way to learn and make wise financial decisions in a rocky economic time. Basic Checking The simplest account at the majority of banks is a basic checking. This allows you to deposit and withdraw money, with either few or no transaction restrictions or limitations. Basic checking also allow you to write checks directly, making it easy to pay rent, mortgage, bills, etc. The only flaw with something so basic is the lack of interest your money will gain. Most basic accounts earn little to no interest. Money Market Savings A Money Market Savings account is relatively similar to the basic checking system in that you can write checks directly. The difference, however, lies in the transaction limitations, making it difficult to make several purchases or write several checks in a month. The added benefit of the Money Market Savings is the interest rate, which is typically higher than the basic checking interest rate. The interest rate is based on the deposit balance, allowing people with more money in the account a higher interest rate. Savings Another common money saving measure at banks is the traditional savings account. Savings accounts allow you to make as many deposits and transactions as you want throughout the month, with no transaction restriction, making it a great option for most people. Another benefit is the earned interest that comes along with this account, and the rate does not change if your balance does. Savings accounts are perfect for anyone looking to save a lot of money, while earning a reasonable amount of interest, in order to make large purchases in the future. Certificate of Deposit (CD) A Certificate of Deposit, more commonly known as a CD, offers the highest interest rate of any bank account. Unfortunately, CD's require time commitments from a few months to 10 years or more. The good news, however, is that the more time you commit, the higher your interest rate will be. So, if you want to buy a house in the next ten years, committing to a CD may be a wise choice. Discuss Your Options While reading about different accounts is helpful, nothing is as effective as visiting different banks to discuss your options with an investment representative or financial advisor. Knowing your options and what will work best with your money will make determining which account you want a much easier process. If you're looking for banks in Somerville, NJ, locals recommend: http://www.somersetsavings.com/home/contact/hours/somerville_office
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