For most people, when they think about having a bank account, they assume that it’s just your basic checking or savings account. However, there are so many options when it comes to depositing money at your local bank. From the traditional checking and savings to CD’s and money market accounts, you can be sure that there is an account to meet all your needs.
Checking Accounts: They are one of the most common types of accounts because you can easily deposit and withdrawal funds and they can be linked to a debit card which allows you to easily make point of sale or online purchases. You can pay bills online using either your debit card information or if accepted by the vendor, your account and routing information. Most checking accounts do not pay interest, and some accounts do have fees based on the average daily limit or if you exceed a specified number of ATM or debit card transactions.
Saving Accounts: These are another common and well-known bank account. Traditionally used to put extra money in that’s not needed for monthly bills or to help save for a large expense. They do allow you to earn interest, although at a very low rate. You do not have the access to funds like you do with a checking account: no debit card to make point of sale or online purchases and there may be a limit to the number of withdrawals you can make per month without being charged a fee. BUT, that’s a great way to make sure that the money put in your savings account doesn’t get easily spent right away!
Club Accounts: These types of savings account were once very popular back in the 70’s and they are making a comeback. You can deposit as little as $1 a week into your Club Account, vary the amount week to week, and if your daily balance remains above $5 – you earn a little interest. You can have funds directly deposited into your Club account each week. Typically, in October, the funds become available and many people use them for Christmas shopping. You can read our blog on how they are the new lay-a-way here!
Certificate of Deposit (CD): A CD is a great way to earn some higher interest on your money. One of the rules of a CD is that you must not touch those funds for a set amount of time – you can choose from several months to a few years. A minimum initial deposit is required, and if you need to access the funds prior to the maturity date, you will incur a penalty. They are a great way to save money if you won’t need access to the funds until the end of the term.
Money Market Account: They are a form of savings account, but they offer higher interest rates than your basic account. With that comes a minimum balance that you are required to keep in the account. Since the interest rate varies based on the market, you will not have a fixed rate. Some banks may offer check writing as an option on the account, but like the number of withdrawals, there will be a limit.
There are a lot of options out there to choose from depending on what your financial goals and needs are. It’s important to remember that one account probably won’t do everything that you need it to and that you can open multiple accounts to accomplish your goals. Litchfield Bancorp offers a variety of accounts and we’re always happy to answer any questions you may have. Give us a call or stop into any of our local branches!
Litchfield Branch Manager, Vice President
NMLS MLO ID: 698742