Which Commercial Bank Account Matches Your Needs?

Commercial banks offer several types of accounts, in order to determine which option works best for you, consider the following:

  • Savings Accounts provide a place to safely store your money and earn interest. An advantage of savings accounts is that they are liquid; that is, your money is immediately available to you for withdrawal. Also the interest rates for savings accounts are higher than checking accounts, so their rate of return is higher.
  • Checking Accounts are another place to hold your money, they are liquid as well. You can transfer your money to another personal or business simply by writing a check. Some checking accounts pay interest on your money.
  • Certificates of Deposit (CDs) are a good place to put your money if you would like to earn a higher rate of interest. The downside to CDs is that you will incur a financial penalty if you withdraw your money before the CD matures. The maturation date varies according to the type of CD.
  • Money Market Accounts are similar to savings accounts, but they pay higher rates of interest. They typically require a higher minimum initial investment than a savings account. They are as liquid as regular savings accounts and are a good place for your money if you can meet the minimum balance to open and maintain the account.
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