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What are the most common types of accounts?
Most people have savings, share draft or checking accounts. Some financial
institutions require that you have a minimum amount of money in these accounts to avoid fees or earn interest. Ask for a list of fees and limits before you open any
account. An account may be set up for use by one or more people. Check with your institution about the best option for your situation.
Savings Accounts
 There are several types of savings accounts. Credit unions call these share accounts. All pay interest (dividends) on your money. Most
include an Automated Teller Machine (ATM) card that lets you deposit and withdraw money from your account. You do not need much money to open a savings account - five
dollars is all it takes at some institutions. The advantage of a savings account is that you can deposit small amounts of money and watch your savings grow.
 Passbook or statement savings accounts - offered by most institutions - are easy to use. You can deposit money into your
account at the teller window, at your ATM, by mail or by Direct Deposit. You can take money out of your account by using a withdrawal slip or an ATM card. There may
be limits on the number of transfers you can make, such as moving money from one account to another or paying bills by telephone.
With a passbook savings account, all of your transactions
(deposits and withdrawals), fees and interest earned, are recorded in a small booklet called a passbook. Take your passbook to the institution when you want to make a deposit, a
withdrawal, or to find out how much interest you have earned. The teller will print the transaction, interest earned and your new balance in the passbook.
With a statement savings account, you get a statement, usually quarterly, that lists your transactions and interest earned during that period. Keep track of your deposits and withdrawals so
you can compare them to your statement. Contact your institution immediately if you find an error. Club and other special purpose accounts let you save
money for a specific purpose, such as the holidays or a vacation. Interest rates on these accounts are generally lower than on other types of savings accounts.  Certificates of Deposit (CDs) are
another savings choice. Credit unions call CDs share certificates. In
exchange for leaving your money in an institution for a set period of time (such as one, two or five years), you may earn a higher rate of interest than
on a regular savings account. In fact, the longer you promise to keep your money in a CD, the higher the interest rate may be. Think about your needs before opening a CD. You will pay a
penalty if you withdraw your money early.
Checking Accounts
A checking account is useful if you would rather pay your bills by check instead of with cash, credit cards or money orders.
Credit unions call these share draft accounts. There are different types of checking accounts. All let you withdraw money from your account by writing checks. Many come with
ATM/debit cards. Some accounts pay interest.
What are the most common types of checking accounts?
A regular checking account lets you write checks to make
payments. Depending on the account, you may be able to write an unlimited number of checks without a charge, or you may be charged a fee each time you write a check. Money
may not earn interest in a regular checking account. Many institutions offer free accounts for senior citizens. Interest checking accounts pay interest and let you write as many
checks as you want. Usually you must keep a minimum balance in your account. If you do not, you will pay fees and may lose some interest. Banks and savings and loan
associations sometimes call these NOW accounts.
Special accounts, such as "basic" or "no frills" checking accounts, are offered by many institutions. They have
restrictions, but cost less than other accounts. They usually limit the number of checks you can write each month, and the number of deposits and withdrawals you can make during a
specific period of time. In addition, these accounts usually do not pay interest.
With a checking account, your institution will send you a statement on a regular basis, usually monthly, that shows:
- The amounts deposited into your account and the dates
- The amount of interest earned on your account, if this applies
- The amounts paid out of your account from checks and withdrawals
- Any fees you were charged
Your statement may also include canceled checks. With some accounts, canceled checks are not returned, but copies can be obtained for a fee.
How do I choose a deposit account?
Think about your needs. Most people want a checking account to pay bills and to deposit paychecks, government benefit checks and other money. A savings account can be used to
set aside money. Use a savings account to save for emergencies or for a special purchase, such as a TV, car or down payment on a home. Ask the following questions:
- How much money do I need to open the account?
- How much do I have to keep in my account daily to avoid fees?
- What is the monthly service charge?
- What are the fees for bounced checks or non-sufficient funds?
- How many checks can I write before extra fees are charged?
- Will canceled checks be returned to me? If not, how much does it cost to get a copy?
- How many withdrawals can I make each month?
- Does this account pay interest? What is the rate?
- Does an ATM/debit card come with this account?
- Will I be charged a fee to use the ATM/debit card at this institution?
- Will I be charged an additional fee to use the ATM/debit card at another institution?
- Are there other fees?
How do I open an account?
Once you have decided which deposit account best meets your needs, you are ready to open one. You will need to share
certain information about yourself with the institution, such as your name, address, phone number and Social Security number. Some institutions will ask you to fill out forms with this
information; others may enter it directly into a computer, You will also need to show picture identification.
You will need to sign a signature card or a computer pad so
your signature will be on file. Your institution will use this signature to verify that you - and not someone else - have signed your signature on future deposits and withdrawals.
Some institutions may ask for a thumb print as well to make sure no one else can withdraw money from your account. Signing the signature card means that you agree to all the
fees, terms and conditions of the account.
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