Deposit Account or Checking Account Which Should I Open?
A deposit account or checking account, which to open? Both is the answer, the checking account is a transactional account which you can pay your bills from and the deposit account would be your savings account. The savings account could be a savings account or a certifiate of deposit. With current savings account rates and CD rates so low right now it doesn’t make a difference as far as the interest the account will earn but use a CD calculator to figure out how much interest your accounts will earn. Though since the best CD rates are low you will be depressed when you see that you won’t earn that much money on an interest bearing account.
With the checking account avoid “overdrawing your account,” which can happen if you write a check or otherwise attempt to withdraw (by mistake) more money than you have in your account. Besides trying to pay for daily living expenses, you may need to buy a car, pay off debts, save for your children’s education, take a vacation, or buy a home.You may want to have family members come up with ideas.It’s a way to monitor your financial health.
How do you manage all these financial challenges and at the same time try to “buy” a secure retirement?Shop around for a good deal, preferably an account without a monthly maintenance fee and that earns a decent interest rate. Yes checking account rates are lower than bank CD rates.You may have other financial resources that aren’t included in your net worth but that can help you through tough times.
Pay attention to your bank statements.These transactions can be costly.It also is possible to overdraw your account using your debit card at the ATM or when making a purchase.A strong net worth also will help you through financial crises.Keep your checkbook up to date by recording all transactions, including ATM withdrawals, bank fees, purchases you make using a debit card, and any other deductions that do not involve writing a check.
Look at your statement as soon as possible after it arrives in the mail or monitor your account more regularly on the Internet or through your bank’s telephone banking service.Write on each card what you need to do to accomplish that goal:
When do you want to accomplish it, what will it cost (we’ll tell you more about that later), what money have you set aside already, and how much more money will you need to save each month to reach the goal Your aim is to create a positive net worth, and you want it to grow each year.
Immediately report any errors or unauthorized transactions (to protect yourself from accusations that you were negligent in managing your account).Online banking also allows you to monitor your account without having to wait for a statement in the mail.
You may be going through a major event in your life such as starting a new job, getting married or divorced, raising children, or coping with a death in the family.Some goals you may be able to borrow for, such as college, but you can’t borrow for retirement.Make retirement a priority!
And remember that what’s good for your parents or your friends may not be best for you.Yet like many people you may wonder how you can achieve that dream when so many other financial issues have priority.Your net worth is part of what you will draw on to pay for financial goals and your retirement.
Review your net worth annually.Sort the cards into two stacks: goals you want to accomplish within the next 5 years or less, and goals Sort the cards within each stack in order of priority.See If at First You Don’t Succeed) Consider Internet (online) banking.
Don’t leave something out at this stage because you don’t think you can afford it.It starts with a dream, the dream of a secure retirement.How do you turn your dreams into reality?Identify other financial resources.Start by writing down each of your goals on a 3″x 5″ card so you can organize them easily.Recalculate your net worth once a year.
You may have aging parents to support.This is your “wish list.Also promptly compare your checkbook with your monthly statement or review your account information online or by telephone.Banks usually offer several accounts to choose from with different features, fees, interest rates, opening balance requirements and so on.
This saves on the costs of postage and buying paper checks.This service allows you to make payments or move money from one account to another through your bank’s Web site instead of (or in addition to) writing and mailing paper checks.This needs to be among your goals regardless of your age.