Category Archives: Deposits

Deposit accounts and their types

A deposit account is a type of bank account which permits the account holder to deposit and withdraw his money, whenever needed. Some of the banks charge a service fee; others offer interests on the basis of the deposited fund. Below are given some of its types.

A checking account is that sort of deposit account from which you can withdraw cash quickly and securely whenever needed. They are not meant for savings or earning interest. In these accounts the customer can deposit and withdraw any sum of fund he wishes to. The savings accounts offer interest. But you cannot withdraw fund directly and to earn it you have keep aside a good part of your liquid assets.

A money market account offers a substantially good rate of interest (on the basis of current rate of interest) and demands a high amount of balance too. A very short notice is needed for withdrawal. The time account does not allow the withdrawal of cash for a fixed period of time.

Importance of FDIC Insurance

bank depositsBank crunches and subsequent failures have taught us the importance of FDIC insurance. FDIC stands for Federal Deposit Insurance Corporation. FDIC insures up to $100000 of your deposit if you have a personal account. If you are a retiree, you get a cover of $250000. This is a great thought as the retirees have their lifetime savings invested in a bank and they do not have age on their side to recover from the loss.

Now, these are tough times and though banks lure you with teasing interest rates, it is always difficult to trust the banks anymore. So if you are looking to invest more than $100000, go ahead by doing it under various different accounts, none exceeding the $ 100000 mark. This can help greatly with protecting your entire money.

The importance of FDIC rings truer in the light of over $245 million losses faced by investors owing to bank failures.