Having a bank account is a very important part of saving and financial responsibility. That beings said, a bank account is much like a shoe, one size does not fit all. Consider all the different types of accounts that exist today, and the reason for their existence. You have personal savings accounts, and then you have business type accounts. Some accounts are for more aggressive savers, and others are just to get you started saving like student bank accounts. Consider some of the different types below and decide which ones would work best for you.
Business savings and checking accounts are quite common today. These accounts are great for small companies, perhaps even one man operations, as they tend to need lower cash minimums so that a business can use their cash when needed. Likewise, many fees are waived, like the cost of checks and minimum balance fees and requirements. As a small time blogger I utilize one of these accounts myself and couldn’t be happier.
Money market accounts are for those slightly more aggressive savers. These types of accounts have a higher earning rate, but at the same time they come with more restrictions. Meaning, you typically need to keep a minimum amount of cash in the account at all times. If you fall below that threshold you might be assigned a fee of some sort.
Online bank accounts are an excellent type of account for online or virtual businesses. If you’re business transcends geographical borders then there’s no reason why your bank account can’t as well. Online banks tend to have less overhead than traditional brick and mortar banks. The reduction in overhead tends to be passed along to its account holders in the form of lowered fees and higher interest earning rates.
Cash deposit accounts can also have more aggressive rates as well. The catch with these accounts is that they tend to be highly illiquid. Meaning, you lock in your money for a set amount of years, typically anywhere from one to five years. There are even accounts that can reach ten years, but remember your money is tied up for that long and withdrawing early can raise potential penalties or a forfeiture of interest earned during that period.
Regardless of the type of account that works best for you, the most important aspect is to open any type of account period. This will ensure that you start saving for the medium term goals in life, as well as for retirement.