Types of Bank Accounts - Why do you need one?

2 years ago   •   .4 min read

.By Laine Redpath
.Table of contents

Bank accounts are a great way to store your hard-earned cash, but there are so many different types of bank accounts. Which one should you choose? Here's everything you need to know:

Personal Bank Accounts

A personal bank account is any type of deposit account that has been designated for personal use. Personal bank accounts can be savings accounts, checking accounts, certificates of deposit (CDs), money market accounts (MMA) or health savings accounts (HSA). A consumer can open a personal bank account at a financial institution that offers financial services such as banking and investing in funds. A consumer may also choose to open multiple types of personal bank accounts at different banks or credit unions.

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Checking Accounts

Checking accounts are used to store funds that you need to access on a regular basis.

When you hear the term "checking account," what do you picture? A paper checkbook? A debit card? While these are all common ways of accessing money in checking accounts, they're not the only options. Generally speaking, a checking account is used to store funds that you need to access on a regular basis. These accounts are also known as demand deposit accounts since they allow customers to make withdrawals and deposits at any time. In addition, many banks offer online and mobile banking platforms that allow you to manage your account without having to visit an actual branch location.

If someone asks for permission to write a check against your bank balance, it's probably because they want cash from your account (and not because they want access). Banks don't actually issue physical checks anymore; instead, they send electronic instructions through ACH or wire transfer networks so that funds can be transferred out into another person's bank account or directly deposited into their own account at another financial institution.

Saving Accounts

Savings accounts are used to store funds away for longer periods of time.

A savings account is a great place to store your money. This type of bank account can be used to save up for a big purchase, like a car or house. Savings accounts also help you prepare for future expenses such as college tuition, weddings and more. With a savings account, you can earn interest on your deposits that grows over time.

Savings accounts are safe and secure because they’re protected by the Financial Services Compensation Scheme (FSCS). This means that your funds will be protected if the bank goes bankrupt or closes down unexpectedly

Business Accounts

Business accounts are designed for the needs of businesses rather than consumers. If you are in the business world, then you should know that setting up a separate business bank account is an important step. This involves having two different types of accounts: one for your personal finances and one for your business expenses. The reason why this matters is because it helps to protect both sides of your finances from any potential legal issues or financial conflicts.

Everybody who’s ever worked in the business will tell you that a business bank account is a must. This is an account that differentiates between your personal and business finances, and it’s essential for keeping track of your finances, ensuring accurate tax returns, and managing the cash flow.

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