Checking and Savings Accounts to Make Deposits and Earn Interest

A checking account is a solution that allows money deposits and withdrawals. This is a liquid and flexible tool in that holders can make an unlimited number of withdrawals through electronic debit, ATMs, checks, and other ways. A savings account, on the other hand, is a useful tool for customers who wish to grow their money and earn interest. There are restrictions on the number of deposits and withdrawals allowed, and penalty charges apply. Most financial institutions offer such products, including Toronto Dominion, Scotiabank, the Royal Bank of Canada, and others.

Types and Benefits of Opening a Checking Account

Using a checking account is a safe and convenient way to make payments and is an alternative to purchasing money orders. Some financial institutions even offer a modest interest rate that helps users to save money. In addition to these benefits, many banks offer low-cost or free services such as free-of-charge check cashing. There are two types of products available - business and personal. Business solutions come in different varieties, depending on whether customers need a product with basic features or more services. Some banks offer products with no monthly fees and allow an unlimited number of online transactions. There are also rewards programs, with customers earning points that can be converted to cash.

Banks also offer express and joint checking products. The former are suitable for people who rarely need to visit a local branch. The latter are a good solution for spouses and partners and are used by both holders.

Features of Savings Accounts

This product comes with different interest rates and fees depending on the issuer. Customers can choose between two types of products, money market and passbook or basic savings account. The latter offers a low interest rate on deposits and has low or no minimum balance requirement. Some banks set limits on the number of withdrawals and deposits, and interest is paid on a monthly basis. Customers can choose from different products such as basic, tiered, and high interest solutions. With some products, balance increases lead to a higher interest rate. This is done to encourage customers to deposit more funds. Holders with balances of $5,000 and higher typically enjoy a competitive interest rate. The rate of return depends on the product, and it can be as low as 0.25 percent and as high as 1.1 percent or higher. Money market accounts also have limitations on deposits and withdrawals, but the main benefit for holders is the higher interest rate. The minimum balance is also higher compared to other products. In addition, banks also offer certificates of deposit whereby holders deposit money for a certain period of time.

Checking vs. Savings Accounts

While both products allow customers to store money, there are some differences between them. Most checking accounts do not offer interest, but this is a safe way to keep your money. It is also an alternative to using cash and carrying large sums of money. On the downside, some banks charge fees for checking. Savings accounts are intended for people who wish to set money aside, with banks offering free money for keeping deposits with them. When it comes to choosing between both types, checking products offer a convenient access to your money. This is because they allow for an unlimited number of transfers. Unlike them, customers are limited to 3 to 5 transactions a month with savings accounts. The application requirements are not as strict, however, and a history of bounced checks does not automatically cause a rejection. This product is not intended for frequent use. It is good for customers who are looking for ways to deposit their money for short-term or long-term savings. A basic product is a better solution for shopping, paying utility bills, and other day-to-day transactions.

Choosing a Product

There are questions to ask your bank before making a decision. What are the options for making deposits and withdrawals? How much do they charge for checks? Is the account federally insured? Are there products for minors?