The Types of Bank Account Available In The USA

Here is a guide to the kinds of consumer bank account available in America.

Checking Account

Checking accounts are the most commonly used personal bank accounts in the United States. These are the most simple accounts available. They are deposit accounts: allowing consumers to deposit and withdraw money free of charge. Most people deposit their paychecks and make their daily payments using their checking accounts – which are usually connected to a debit card. There are some conditions that need to be taken into account before signing up. To see the conditions that need to be agreed when signing up for a typical checking account in the USA, visit

Most checking account providers allow consumers to set up an arranged overdraft. Arranged overdrafts allow for the automatic borrowing of a predetermined amount of money when an account has been emptied. These overdrafts incur fees when used, which is how a bank will earn money on checking accounts.

In recent years, a new generation of mobile banking application has allowed checking accounts to be accessed via mobile devices. Checking account debit cards can also be made use of as part of an app – meaning that it is far rarer to actually carry around a debit card these days. Contactless payments can be made using checking account applications thanks to a technology known as Near Field Communication. NFC technology utilizes radio waves to allow communication between a mobile phone and a card reader.

Savings Account

Savings accounts are designed to appeal to people who want to, well, save. They typically offer higher interest rates than checking accounts. Interest is calculated by applying a percentage to the amount of money held in an account. The average interest rate for a savings account in the USA is 0.06 percent. This might not seem like a great deal, but the gains naturally increase with the amount of money that is deposited. This interest rate usually prevents people from using their savings accounts as their checking account. Regular withdrawals from a savings account will negate the benefits of having one in the first place!

Banks do not usually provide checks or a debit card tied to a savings account. This reflects the purpose of the product. Consumers need to actually visit a bank branch if they want to make a withdrawal from a savings account. Banks may charge fees if a consumer wants to make more than 6 withdrawals from a savings account in one month. Withdrawal fees are the main way in which banks earn money from savings accounts.

Money Market Account

Money market accounts are designed for people that have a high income. They are somewhere between a savings account and a checking account in terms of the services they provide. Like a savings account, they have a high-interest rate and withdrawal limits. Unlike a savings account, a money market account often comes with debit cards as standard. In order to open a money market account, consumers need to make a large initial deposit. Banks need a high flow of money running through them in order to remain financially viable and offer risk-free loans. For this reason, banks often encourage high earners to purchase money market accounts. Banks need to be held to very high standards when it comes to spending and loaning out money that has been entrusted to them. During the 2008 banking crisis it was discovered that banks had been making risky investments with the money deposited into them by consumers.

Brokerage Account

Brokerage accounts are designed specifically to hold money that is intended to be invested. Investment is a very common way of increasing financial safety, but it doesn’t come without some inherent risks. Brokerage accounts are often advertised as being safe ways to guarantee protection from risk when investing.

Pension Pot

A pension pot is a kind of account held by people saving up so as to have some money when they retire. These retirement funds are advertised to consumers as being high stability, high-interest options for the long-term storage of accumulated wealth. Pensions are immensely important – especially in countries like the USA that do not have very robust social elder care systems. If you have not started saving for a pension yet, get started now!

Certificate of Deposit Account

Certificate of Deposit accounts are saving accounts with very high-interest rates. There is only one catch: once money is deposited it cannot be accessed until a predetermined date in the future. People often use these accounts to save money for their children to go to university with.

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