Today we will discuss some banking basics which are compulsory to know before opening a bank account. If you don’t know these basics, then you may suffer by various means. So, let’s begin this informative short blog post.
01. What is a bank deposit
To keep money safe and get some profit from the savings people put their money in a banking institution. So here the given money to keep safe is known as a deposit. Deposit varies on different types of bank accounts.
02. Which types of account you do need
There are four common types of bank accounts all over the world. Whatever your account is, make sure that you are getting the highest benefits and interest rates from the bank account that you are going to open. In the below, we will discuss these bank accounts.
Checking accounts
A checking account is where people can deposit their money and withdraw the money through a check or debit card. And also you will be able to check your account online whenever you want. One thing you need to keep in mind is that a checking account doesn’t pay a high-interest rate.
Savings accounts
A savings account is where people can deposit their money but it is very difficult to spend or withdraw their money whenever they want. As a savings account has a higher interest rate than a checking account, the account holder doesn’t receive any debit card or check. If you want to withdraw money, then the bank will charge you a fee for the withdrawal. To withdraw money from a savings account, you may have to submit some particular documents for the identity verification purpose of your account.
Money market accounts
It is one kind of savings account where people can withdraw and spend their money through a check or debit card. But there are some terms and conditions. You will be able to withdraw 6 times in a year and to initiate these withdrawals, your account must have a minimum deposit of $2,500 USD to $25,000 USD. The most amazing fact about this account is you will get a higher interest rate than a savings account.
Certificates of deposit
With this type of bank account, you will have to keep your money locked up with a financial institution for a specific time period. It has a higher interest rate than money market accounts. You may also withdraw your money within the deadline of the specific time period. But the bank will charge you a fee depending on the money of your account.
03. Differences between debit and credit cards
There are differences between debit and credit cards. ATM booth will charge a small amount for each transaction you make. In below, we will discuss the advantages and disadvantages of debit and credit cards.
Debit card
When you deposit money in your account to withdraw your money at a particular time whenever you need or pay for something. You will be able to pay or withdraw only when you have your own money. Taking a loan from savings and checking account in advance to pay for goods or services and withdraw money is not allowed.
Credit card
Credit doesn’t require any savings or checking account. With this type of credit card, you may take a loan in advance using your credit to pay for goods or services. But you can only take a loan to a limit that is fixed by the bank account.
04. Focus on transaction facilities
Before opening a bank account, you must focus on the transaction facilities. Money deposits and money withdrawals are under transaction facilities. Make sure that the bank you have selected to deposit money, it is to be near. So that you may be able to deposit your money whenever you want.
The next thing that you need to consider is the availability of the ATM booth so that you may be able to withdraw your money at any time.
05. Documents for opening a bank account
The different bank requires different types of documents. We will give you an exact idea about the common documents below.
- Copy of your national ID or passport Or any type of ID card
- Proof of address
- A person as a reference
After submitting the information, an account number will be given with a debit or credit card. Using the account number, you will be able to deposit your money.
Conclusion
Dear reader, we have come to the end of this informative blog post. We hope, this blog post was helpful for you to learn about 7 common banking basics at the time of opening a bank account. If you liked this blog post and if the blog post has benefitted you, then please don’t forget to leave your valuable rating about this blog post below.
