Types of Bank Accounts and their Functions 2023 Comprehensive Update
Types of Bank Accounts – Operating a bank account comes in different constructs. Each kind of bank account has its own features and functions. The main reason you are here is to know what these different Bank Accounts are all about.
What is a Bank Account?
A bank account is a financial account kept by a bank or other financial institution in which the bank’s and a customer’s financial transactions are documented.
Types of Bank Accounts
When trying to open a bank account, there are varieties of accounts that you will have to choose from depending on the features.
Listed below are various types of bank accounts:
1. Savings Account
This is a common type of bank account. As the name implies it is used for keeping money for future use with a modest interest rate.
This account is suitable for people with short-term goals and the requirements needed to open the account are always very minimal depending on the bank.
2. Current Account
This is also known as a checking account in some regions. It is designed for daily financial transactions and it also provides easy access to your money through the use of debit cards, checks, and online or mobile banking.
They can be easily liquidated and are ideal for paying bills and making everyday expenses.
3. Money Market Account
This type of account is a combination of savings and a current account. Their interest rate is way higher than the regular savings account.
Although it may require a higher minimum balance, this is a great choice for those who want to earn more on their savings.
4. Student Account
This account is designed basically for students in mind. They offer lower fees, options for overdrafts, and educational benefits.
The account helps the student navigate their financial journey while also being a student.
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5. Health Savings Account
This account is tailored basically for health or medical expenses. The contributions made into this account are tax-deductible and it can be used to solve medical problems or expenses.
6. Joint Account
The joint account is basically shared by two or more individuals such as couples or business partners. The holders of these accounts hold equal access to the funds and decision-making.
7. Business Account
This type of account helps solve the financial needs of a business. It provides a plan where one can manage their finances separately from their personal accounts.
They are made up of various forms like the business current account, savings account, and merchant services account.
CSN Team.