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Types of savings accounts

There are many different types of savings accounts available. Choosing the right one for you can be made simpler when researching the types of savings accounts.

The first thing to think about is what will you be using your savings account for? Once this is determined, picking the appropriate account will be much easier. For one, you will want to decide if instant access to the savings account is necessary. If so, you will want to open an account that allows you to withdraw the money any time. However, if having instant access is not a necessity, consider a term or notice savings account. This type of account may provide a better rate of interest but the bank must be informed ahead of time that the money is going to be withdrawn. In some cases the amount of time needed is thirty to ninety days. If sufficient notice is not given, then a penalty is required.

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Also determine where you would like to manage the savings account. Some can be managed online or others strictly managed at the place of business or via telephone. Online savings accounts generally have higher interest rates than banking only at the facility where the savings account was opened. There can be good deals with regards to interest when banking through the telephone or the bank branch.

Decide if you will want to be making regular deposits into the savings account. If you make deposits on a regular basis, which is determined by the individual bank, then a regular savings account may be right for you. Often times there are good interest rates, but regular deposits are required and some banks will put a limit on the amount of withdrawals that are allowed each month.

One of the main factors when choosing a savings account is the interest rate. A particular bank may offer high interest rates in the beginning, but often times these are simply introductory rates and will lower in time. If you do choose a high introductory interest rate, make sure to ask what the interest rate will be once the introductory rate is expired.

Make sure to keep an eye on the return that your savings account is giving, as account rates can change and drop.
 

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