Investments: Characteristics Of

Bank Accounts represent money held on deposit at a commercial institution such as a bank. The money is available to you without delay. The bank could be of the neighborhood bricks-and-mortar variety, bricks-and mortar and online, or exclusively online.

There are three basic types of bank accounts: checking accounts, savings accounts, and certificates of deposit.

Checking Account: You can access your money through an ATM, by writing a check, through a bank issued debit card, or by asking the bank to transfer money for you electronically (known as a "wire transfer.") If the bank is a local one, you can also access money from a bank teller.

Checking accounts generally do not give you interest on your money.

The account may be free, or there may be a charge per check - or a combination of an amount of free checks plus payment for additional checks. Some banks require minimum balances to keep a checking account open.

Savings Account: Savings accounts are bank accounts that earn interest. Your money is accessible on demand through ATM machines, through bank issued debit cards, and sometimes by writing checks. If the bank is a local one, you can also access money from a bank teller.

With a traditional savings account, you can deposit or withdraw cash from a local branch, by mail or through an ATM. With online banks, deposits are made by transfer from other accounts or by mail so they can take a few days. With an online bank, to withdraw cash, you may have to transfer money to another checking account instead of by using an ATM.

Certificate of Deposit, commonly known as CDs: Money held on deposit at a commercial institution such as a bank. These accounts usually pay a higher rate of interest than savings accounts.

By purchasing a CD, you agree to keep the money in the bank for a specified period of time, ranging from very short to longer term. Rates vary from bank to bank and by the length of time until the CD matures.

There is usually a penalty for early withdrawal of funds from a CD.

If you are interested in purchasing a CD, check to see whether long-term or short-term CDs offer the highest rate of interest. If you need money prior to the maturity date, it is possible to borrow against CDs to help preserve the interest.

You can compare rates at: www.Bankrate.com (Click on Compare Rates, then on CDs)

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