Types of deposit accounts
Let’s look closer at deposit accounts and some key benefits they offer.
Checking accounts
Checking accounts are ideal for everyday purchases. They're more flexible than savings accounts and come with a debit card and checks. You can withdraw funds anytime via ATM, electronic transfer, or at a branch location.
Savings accounts
Savings accounts are a safe place to stash cash for emergencies or future expenses. But most come with monthly transaction and withdrawal limits. So, you should avoid using a savings account for everyday expenses. Still, the earning potential is higher compared to traditional checking accounts.
Certificates of deposit
Certificates of deposit (CDs) combine the best of both worlds. They provide a safe place to store your money, and you earn a generous return. It’s more of a long-term saving solution, however. The funds must remain in the CD for a set period - between a few months and a few years to avoid penalties. There’s also a minimum deposit requirement to open a CD.
Money market accounts
Money market accounts are a blend of checking and savings accounts. You can earn a higher return on your money and limited check-writing capabilities. Expect a higher opening deposit requirement for a money market account, and you’ll likely have to maintain a certain monthly balance to keep the account open.
Key benefits of deposit accounts
Now that you’re aware of the types of deposit accounts to keep your money safe, here are some benefits they offer:
Insurance
The National Credit Union Administration (NCUA) backs up to $250,000 in deposits. The deposit must be to an account held at a federally insured credit union to qualify for coverage. So, if your credit union suddenly vanishes without a trace, your funds won’t follow suit.
If your money is in a traditional bank, your money is also protected. The same coverage is available under the Federal Deposit Insurance Corporation (FDIC). Like credit unions, the bank must be FDIC-insured to apply to your deposits.
Risk-free investment
There are many ways to invest and grow your money. But more widespread methods, like investing in the stock market, aren’t without risk. And depending on market conditions, you can take a sizable loss. Regular deposits may not provide the same gains, but your funds will grow over time. Plus, it’s a risk-free investment; you can access your money when needed.
Promotional offers
It’s common for financial institutions to extend promotions to attract new customers. For example, opening a new checking account and setting up direct deposit may entitle you to earn rewards. Or maintaining a specific balance in a savings account for a designated duration could also lead to additional financial incentives.
The bottom line
Deposit accounts provide you with a host of financial benefits. You'll have peace of mind knowing your money is in good hands. Plus, you'll enjoy various perks that can enhance your financial health.
We have several options if you’re interested in opening a deposit account. You can take advantage of our eLife checking account or CDs that offer hefty APYs. Or you can explore more traditional checking and savings accounts.
Connect with us today, or use the online chat tool accessible 24/7 to learn more. We can help you evaluate your options to find the best fit for your financial situation.
