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Types of Bank Accounts

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Checkout this power point presentation which explains the different types of accounts in the bank. Though banks offer several different types of accounts, they can be broadly divided into three types explained in this ppt. – PowerPoint PPT presentation

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Title: Types of Bank Accounts


1
Types of Bank Accounts
2
Introduction
  • Though banks offer several different types of
    accounts, they can be broadly divided into three
    types
  • Savings Accounts
  • Money Market Deposit Accounts
  • Certificates of Deposit

3
Contd
All these bank accounts are offered by the major
banks if not the small ones, so the bank you
choose probably wont restrict this decision,
although it does make sense to choose the account
type you want first, so you can focus on that
type as you shop around to various banks. So
here are some more details about these banks
4
Savings Accounts
  • These are intended to provide an incentive for
    you to save money
  • They usually pay an interest rate that is higher
    than a checking account but lower than a money
    market account
  • Some savings accounts charge a fee if your
    balance falls below a specified minimum

5
Money Market Deposit Accounts (MMDAs)
  • These accounts invest your balance in short-term
    debt such as commercial paper or Treasury Bills
  • The rates that they offer tend to be slightly
    higher than those on interest-bearing checking
    accounts, but they usually require a higher
    minimum balance to start earning interest
  • These accounts provide only limited check writing
    privileges, and often impose a service fee if
    your balance falls below a certain level

6
Certificates of Deposit (CDs)
  • These are also known as time deposits because
    the account holder has agreed to keep the money
    in the account for a specified amount of time,
    i.e., anywhere from three months to six years
  • The money will be inaccessible, and the account
    holder is rewarded with a higher interest rate,
    with the rate increasing as the duration increases

7
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