Bank Savings Account

What is a savings account and why do I need one, you may ask. When you have a little extra money lying around, you can opt to depositing it into a bank savings account. Which not only keeps your money safe, but can earn you a little extra cash, based on the interest rate paid by the bank where you open the account. The financial institution will pay a rate of return; also known as APY (annual percentage yield), based on the amount in the account. Besides, if you keep your money in a savings account not only will you be earning interest, but you will less likely spend it.

The amount of interest you can earn in a saving account depends on the bank you have selected and the type of account. You have many options out there. Banks are always competing for your money. Typically banks offer two types of savings accounts: a basic savings account & a money market account. A basic savings account will have a low minimum balance requirement or no balance at all, however this type of account generally offers very low interest rate. Which means your money will not earn very much. A money market account will pay a higher interest rate, but also requires you to have a larger quantity of money.

Bottom line, make sure to shop around and compare what each financial institution has to offer. Consider the following:

• Interest rate paid for your balance
• Minimum balance requirements (make sure to check if the bank will charge you if you don't have a certain amount in the account at all times
• Check for any fees or service charges on the account