A person need not be well versed about the current banking trends and financial strategies, in order for him to be able to manage his money well. All a person has to do is to open the best bank account with a bank that he trusts.
There is no hard and fast rule in identifying what the best bank account is and what is not. The matter at hand depends on the needs of a person under the given circumstances. What works best for a particular person may not be the same for another. To illustrate this, what a business proprietor would say about a bank account being the best business bank account may not be true for a student who says of another account to be the best student bank account.
In any case, giving a brief discussion about the various types of bank accounts would help a person identify his banking or financial needs with a particular bank account. Simply put, describing the available kinds of bank accounts may help a person identify whether a particular bank account is the best bank account for him.
Basic Account – This allows the person to set up debits or standing orders for, say, payment of bills or wages. This type of account is usually accompanied by a cash or debit card, which may be used to withdraw cash from a dispenser, or may be swiped directly upon purchase or payment. This is the best bank account for people who wish to limit or monitor their expenses, because payments or withdrawals are dependent on the availability of funds.
Checking Account – This one uses checks as the medium for commercial and credit transactions. This is a convenient method of payment, as one need not go through the process of withdrawing money or making necessary arrangements with his bank. A check may also be used as a security for payment of an obligation, as when it is postdated. This is the best bank account for businesspersons or for people who are engaged in making and receiving payments on a regular basis.
Current Account – This has the debit and standing order features of a basic account, in addition to the checking and overdraft facilities. An overdraft allows the account holder to overdraw up to a particular amount, upon prior arrangements made with the bank. With this account, a person may own a cash card as well as a check book. This account also pays interest on the account holder’s outstanding balance. This may be considered the best bank account by people who wish to avail of the added features.
Money Market Account – This one pays a higher interest rate than current and savings accounts. Usually, this requires a higher minimum balance before the account starts to accrue interests. It also limits withdrawals to up to six times only per month, wherein there cannot be more than three check withdrawals. This is the best bank account for people who are after a very high interest rate.
No-frills Account – This one allows the holder to make payments at minimal costs and charges. However, this does not pay interest and the transactions are limited. This is the best bank account for people who are looking for cheaper and less hassle bills payment methods.
Online Account – This one allows for bank transactions to be done through the internet. This is beneficial in the sense that it is easy, fast, and convenient. The best online bank account is one that has safeguards concerning the privacy and security of the account holder’s personal and financial details.
Savings Account – This one allows the account holder to make cash deposits and withdrawals. Withdrawals can only be made by or under the authority of the account holder, either in cash or through ATM. The account holder is provided an ATM card and/or a passbook, which records the financial transactions. This account pays a higher interest rate on the remaining balance compared to the current account. Banks would normally require a minimum amount of retaining balance in the account within a certain period; otherwise, the account may be closed. This is the best bank account for people who would like their money to grow more. The less they withdraw, the more interest they earn.
Time Deposit Account – This one requires that the account holder deposits an amount, which he cannot withdraw until after the designated period. Meanwhile, interest on the deposited amount is pre-computed at the time of the deposit, which can be withdrawn together with the principal amount deposited. This is the best bank account for people who want to make sure that their money remains intact, while earning interest at the same time.