Savings accounts are a really good way to “hide” your money from yourself if you are easily tempted to spend it on different not so necessary items. If you earned some extra money, got it as a gift or found it on the street and you want to save it for something special, you can save it at your home, of course if that amount is not enormous and you are determined not to spend it easily.
If you want to save money at home, it will be best to find a place you do not visit or open often and hide your money there from yourself. It often happens we forget we have money, that is a good way to save it. However if you are tempted by its existence in your home, the best thing to do is to deposit it on your bank account or savings account.
Now when we are talking about savings accounts, the main thing you need to know is that there are different types of accounts. Differences are often in interest rates and minimum balance requirements. If you simply want to save what you got, you can keep money at home. Or keep it in a bank on savings account that has low interest rates. That means amount of money you deposited won’t be significantly increased and yet you will be able to withdraw it anytime. This type of savings accounts is called regular or basic account.
Qualifying for a higher interest rate can be conditioned by the amount of money you deposit, amount of time you will have to keep your money in a bank, or both if you want really high interest rate.
Interest rates are determined as a compensation for letting your bank use your money and your trust in their services, we already mentioned how they are determined. How much interest you will get may depend of your bank’s offer too, that’s why it is important to research offers of different banks and credit unions and select one that is the most suitable for you.
Types of savings accounts
Types of savings accounts are various, and they can differ depending on deposit and withdrawal options. Withdrawal options can be different, you can agree not to withdraw your money at all until certain period passes, there are accounts which withdrawal options are limited which means the number you can make an withdrawal in a month is determined, or you could withdraw your money anytime, if you decide for this option, you will certainly get lower interest rate.
According to deposit options, there are accounts you can deposit your money whenever you want, and the accounts you open with a certain purpose and deposit certain amount of money every month. If you opened this account, you will be able to withdraw your money in its increased form only for the purpose you opened this account such as Holidays or Education savings accounts. These accounts are often opened for children by their parents for their birthdays, holidays etc.