Passbook Savings Account

What? There is more than one form of a passbook savings account? You’re darn right there is. Just with everything else in life, nothing is that easy. Not until you have the right information to guide you.  So sit back, grab a drink, and get ready to learn about the four types of savings accounts available to you.

Savings Account Option 1 – Basic Savings Account

The basic passbook savings account is the simplest and most common type of account. This account is usually used only to deposit your money in a safe place. To withdraw your money, you’re not often given an ATM or bank card, but need to do it in person at the bank.

The minimum deposit for this form of savings account will tend to be the lowest. As will the interest rate received, usually between .25% and 1%. But hey, it’s the basic account. Kind of like going to Cold Stone Ice Cream Parlor and getting the vanilla flavor.

Savings Account Option 2 – Money Market Accounts

Money Market accounts will offer a higher interest rate, but will have more restrictions and guidelines than the basic account. These restrictions may include:

- Minimum deposits
- Limit of transactions and transfers pre month
- Tier rates for the amount in the account. Meaning, the more you have in the account, the more interest you will receive.

The benefits of this account is that you will receive a higher interest rate than the basic savings account and have the ability to write checks where the money is taken directly out of your money market account.

Savings Account Option 3 – High Yielding Savings Account

High Yielding Savings Accounts are like a combination of the money market account and the basic savings account. They will offer you a higher percentage of interest, usually between 1.5% – 2.5%.

This is a good option for you if you are okay with your money just sitting. In most cases you do not have checks or an atm card to withdraw your money.

Benefit is the higher interest rate. A Drawback is that it is not as easy to withdraw your money and there are higher minimum requirements for the amount in the account.
Savings Account Option 4 – Online Savings Account

This is a new and upcoming style of banking. You might be interested in this if you do not need your money to sit in a standard bank and trust a bank you have not set foot in.

Benefit is the interest rate received is significantly higher, and can be between 3% and all the way up to 6%. The drawback is that you cannot actually walk into the bank.  No matter what type of account you choose, we always recommend personal finance software to keep track of your account standings.

Therefore, when deciding which passbook savings account is best for you, decide wisely and have your money work for you.

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