Types of savings accounts

Wednesday September 3, 2008

Savings accounts come in many different varieties with each being suited to a particular purpose. Choosing the right savings accounts for the right purposes is a good step towards better overall saving practices. If you have several purposes for savings accounts, it can even be a good idea to take out multiple savings accounts in order to cater for each purpose separately.

Transaction accounts

For keeping everyday transactions affordable, transaction accounts can be the best option. Other types of savings accounts can charge high fees for withdrawals and other transactions and may not offer as many ways of accessing your funds. Most people hold a transaction account of some kind.

High interest savings accounts

High interest savings accounts will often be able to provide very reasonable returns on savings, but will usually offer limited withdrawal opportunities. This is something of a blessing, though, as many high interest savings accounts do not pay interest in a month where funds have been withdrawn. Using high interest savings accounts in conjunction with transaction accounts can be the only way for some people to earn interest on savings over time, as it requires a separation of savings from everyday finances.

Online savings accounts

Online savings accounts can be very convenient, and many of them are high interest. Often online savings accounts can be linked to transaction accounts so that transfer of money between them is easy and low cost. Many do not charge monthly account keeping fees and will often not have a minimum balance. This allows new users to sign up right away without needing to put aside money for an initial deposit.

Please visit our comparison page if you would like to compare savings and high interest accounts or to apply online for savings accounts.

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