What are the various types of Bank Accounts?
Bank accounts can be of many types depending on the institution where it is being set up, though all accounts can be placed under one of the following categories:
Checking account: these offer the lowest rates of interest and are mostly used for the purpose of paying for products and services and transferring money to others using checks. As these accounts have the lowest rates of interest the charges for transactions also are usually the lowest.
Money market accounts: these offer an interest on the deposits and also the facility to transfer funds using checks. But in the case of money market accounts the number of transactions and their frequency is limited.
Savings accounts: These do not allow the use of checks.
Time deposits: Here the money deposited is to be kept in the account for a pre-determined period of time for which the rate of interest is also fixed. Usually the interest paid is higher for longer periods of time. Some banks allow withdrawals from time deposits before the period defined but there is an accompanying fine charged for this.
No frills accounts: These are similar to checking accounts but the number of transactions possible per month is usually limited. They also offer a reduced number of services than normal checking accounts.