For those who are new to the financial world, there are two important accounts every individual should have. The first type of account is transactional, like a checking account. This will allow you to access your money when you need it to pay for goods and services. The second type of account is a savings account. The purpose of having these types of accounts is for convenience. Deposit accounts are a way for individuals to store extra cash and earn interest. The account holder has access to withdraw money and the bank records these transactions.
Depending on where you open a deposit account, the bank may reward you with interest or levy fees. Additional charges may be accrued on a deposit account if a customer accesses the account too often in conflict to the terms of agreement that was made with the bank upon opening the account.
There are three types of deposit accounts:
The Federal Deposit Insurance Corporation or FDIC covers many types of deposit accounts. The money in deposit accounts is typically insured. Deposit accounts that are protected by the FDIC are checking accounts, savings accounts, money market deposit accounts, and certificate of deposits (CDs).
Curently, deposit accounts are insured up to $250,000 per bank. If you have significantly more than what the FDIC insures in your deposit accounts, speak to your local bank branch to confirm how much of your money is covered by the FDIC and perhaps move some to a different bank.
