Savings Accounts

Savings Account Rates

There are various savings accounts and savings account rates that can benefit customers in different ways.  However, it is essential that the customer understands factors such as how long he can tie up the cash, when he will need it, and if he can pay the taxes.

Instant Access Savings Accounts

savings accountInstant savings accounts are used as emergency funds.  They are used when the customer is in a hurry or has unexpected costs.  These account often come with cash machine cards so that the customer can receive his money at any time during the day, though there are usually limits on the amount he can take out.  Should the customer’s bank have branches, then he can access his money through any of the branches.  The customer should look for the account with the highest interest, and he should check his savings account rates every few months and switch to cash when necessary.

Notice Accounts

A customer can receive cash only by giving notice of his intention to make a withdrawal.  Should the account be a 90-day notice account, then the customer will have to wait 90 days to withdraw the money or else pay a penalty if getting it earlier.  Notice accounts generally do not offer savings rates that are as good as instant access savings accounts though one’s savings will likely get a higher rate of interest should he lock it away for a longer period of time.

Cash Individual Savings Account

A customer earns tax free interest with such accounts, though there are limits as to how much someone can deposit annually.  Cash individual savings accounts usually do not offer the highest rates of interest in the savings account market; however, they are very competitive due to their tax free interest and often do beat the after-tax ordinary savings accounts.

Regular Savings Accounts
Regular Savings AccountsA person who wants to put away a certain amount of savings every month generally uses regular savings accounts.  These accounts can pay high interest rates, though with conditions that, if closed, can result in loss of interest payments.  Banks use such accounts to build loyalty with customers who already have an account with them.  In fact, some of these accounts can even offer an annual bonus on top of their interest rate to induce their customers, though if customers violate the conditions – for example, they may have to deposit a certain sum every month – then they may not receive this bonus.

Many regular savings accounts pay impressive basic savings rates but with limitations on how much a person can put in each month and how many withdrawals a person can make.  Because many accounts limit the number of annual withdrawals, they are not good sources for emergency cash.

National Savings Accounts
These accounts are probably the safest place for one’s money.  They offer a range of accounts and bonds and are capital secure, meaning the investors will get their money back regardless of circumstance, due to it being federally run and backed.