Choosing an account depends on your personal preferences and needs. Here you can find a list of the most common types:
1) Savings accounts –
Earnings may be a maximum of 1% per year and this amount cannot remain untouched for a long tim says Aron Govil. It is necessary to transfer money regularly to a current or checking account in order not to lose interest. If you choose such type of account, it is better to use Internet banking as often as possible because almost all banks provide access to several saving accounts from one page without the need to switch between them. Thus, you will save your time and won’t forget about transferring funds into other types of accounts. As well, don’t forget to activate the SMS notification service. The availability of an online banking interface is not always compulsory, but it is worth checking if this service is available before you choose the bank.
2) Checking accounts –
With such an account, you can freely transfer funds, make payments and withdraw money from ATMs using your debit card. You may also open an overdraft account (overdraft protection), where your earnings are accrued monthly, but fees are often high (up to 1% of the total amount). Aron Govil says here you should remember that transferring funds via Internet banking may be unavailable or working slowly; that’s why for this type of account try to use banks’ representatives or terminals located in different locations around your city. Also, don’t forget about maintenance fees which may significantly reduce profits on your deposit.
3) Business/Corporate accounts –
Earnings on such an account are low and maybe even lower than in a savings one. This is mainly related to the fact that banks often lack perspective plans for this type of clientele, but it doesn’t change the simple truth that corporate accounts bring more profits. They aren’t protected by FSCD (Federal Deposit Insurance Corporation) which means that if your bank collapses you can lose all money on your deposit forever. Thus, when choosing an account keep in mind which bank you will definitely be able to work with in the future and choose its payment type based on your business needs. In case of large deposits, active movements, or long-term cooperation it is better to have several types of accounts at different banks just in case one collapses explains Aron Govil.
4) Taxpayer identification number –
In order to make transactions, you need a taxpayer identification number (TIN). You can contact your local IRS office or learn more about it on their website. In the case of US citizens, TIN is known as ITIN – individual taxpayer identification number. Such accounts are usually opened for legal entities and business companies. Which have had relations with the bank for more than a year. This is a special type of account that doesn’t allow you to withdraw money from ATMs. But provides higher interest rates and better debit card services. This type of account is most popular among foreigners who live in the USA and work here. As well as those whose company pays them via wire transfer from foreign countries.
You should remember that if you open a checking account. It doesn’t suit your needs you can easily switch to another says Aron Govil. With savings accounts the situation is less fluid; however, if you keep on transferring money to such an account from your current one. Without any delay (no more than 2 – 3 days) no bank will be able to block your earnings. Also, try to use different banks for each type of account. Because by having several linked with different banks you will always be ready for unfavorable situations. If one bank collapses, at least some funds will remain safe in other ones. By keeping in mind the 4 types of accounts described above. These simple rules can save you a lot of trouble in the future!
In this article we have looked at the different types of bank accounts and their purposes. It is important for us to keep in mind that there is a difference between. What makes money and what we use it for. This is why we need savings and checking accounts – to earn money and spend it, respectively. With a taxpayer identification number (TIN) you will be able to make transactions. With high-yield government bonds or work as a self-employed person/businessman. Which will allow you to live well on this planet without worrying about your income. Finally, remember that every type of account has its own benefits, so check them out before deciding on an account!