Different account types serve varied needs. Based on your current financial situation and long-term goals, it’s best to put your money into a few different types of accounts to reduce fees and maximize returns. Most financial institutions offer the following types of accounts.
A checking account is a basic banking account that allows you to pay bills, deposit checks, and make withdrawals. A checking account can be used to keep a small sum of money for your day-to-day banking needs. If you are looking to open a checking account, make sure you opt for one that doesn’t have a fee or a minimum balance requirement.
If you are accumulating money for your emergency fund or short-term goals like a vacation, it’s best to deposit the money in a savings account so you aren’t tempted to spend it. Before opening a savings account, ensure that you compare the interest rates offered by different lenders. You can also consider opening a savings account with a credit union or online bank since the interest rates are typically better.
Unlike a checking account or a savings account, you should also have an investment account that helps you earn high returns to safeguard your future. If you haven’t invested in the market before, you should consider opening a mutual fund. If you have invested in stocks in the past, you can open a brokerage account.
Money Market Account
A money market account is an account that combines the features of a savings and checking account. However, money market accounts offer a higher rate of interest.
Certificates of Deposits (CDs)
A CD account typically allows you to earn a good interest rate. However, you will need to keep your money in the account for a certain period of time. This is a great option if you have money that you don’t intend to spend in the near future.
In addition to these accounts, it’s also important to have a credit card that offers rewards like points, miles, or cashback. When used wisely, a credit card can help you manage your expenses efficiently, while also letting you earn rewards. Ideally, you should look for credit cards that have a low or no annual fee attached.
These are some of the accounts that you should consider opening at the earliest to grow your wealth!