Top Rated Kinds of Bank Accounts

There are different types of bank accounts with different p

There are different types of bank accounts with different purposes. Some require minimum charges fees, while others charge their customers if they take the wrong action.  Typically, a bank has three types of accounts; savings, deposits, and checking accounts. You can easily switch to another bank to take your savings money to the next level.  Here, we'll look at the types of bank accounts. 

1.  Checking Accounts 

Which type of bank account is the best for everyday transactions? A checking account is the most popular and best type of bank account worldwide. It's also the account where many people deposit their checks, and keep their money to yield more interest. It comes with a debit card and can be switched to an online bank. So, you don't need to be carrying huge money around. Instead, open a checking account to boost your savings money.

With a debit card, you can easily make payments wherever you're. However, you’ll be charged a fee and even be deducted some amount Some transactions may take a couple of days depending on the service provider.  This may help you avoid double-spending your money.

This banking option allows bill-paying and budgeting at a fee. Once you join an automatic bill pay service, your payment will be deducted from your account once matures. The good thing is that you won't need the mailing and stamping service to pay your mortgage payment.

To start using the budgeting app,  link your account with the monthly budget to track your expenses effortlessly. This helps you stay on a good track.  But before you open a checking account, check out features like direct deposit, support online banking, and no minimum amount required to maintain the account.

Things to check out for in a checking account    

Credit unions and banks often charge high fees.  This is the common way banks make huge money.  So, conduct research before opening a checking account.

Here are some popular fees    

Overdraft fees: The rule of thumb is to spend less than what you earn. But with a checking account, it's possible to pay more than what you make. This is commonly known as an overdraft and comes with extra fees.

Monthly maintenance fee: It is another part where banks make a huge amount. This means that banks charge users for keeping their money.

Returned check fees: The most difficult part about a checking account is that there is a fee between when depositing your check and during overdraft. Most banks don't have an expiration feature on their checks, but they won't cash a check over six months.  So, when preparing your check, know that the money is gone. The appropriate way is to write it down in your check ledger to avoid forgetting it in the future.

2.    Savings Accounts  

A savings account is one of the best savings accounts for saving money.  It's also the best bank account for keeping money, especially for emergencies.  For example, If you want to save for car maintenance within your budget, including tune-ups, tire rotations, and oil changes, you’ll need to keep a specific amount in the savings account.  But before opening savings accounts, check out things like interest rates, no monthly maintenance fee, and online banking options.

Features to watch out for in a savings account

·         Limited to the number of withdrawals and transfers made monthly

·         A minimum balance requirement

·         Interest earned is taxable highly

3.  Deposit Account

Deposit accounts come with debit cards, although some banks don't provide the feature. This is one of family bank types of accounts that earns much interest compared to the saving account because it separates your savings from daily money. It's also the best type of bank account that provides 3 to 6-month emergency funds.   However, you need to compare several features before having one.

Things to watch out for in deposit account

·         Earns less interest

·         Minimum balance requirements 

·         Limited on the number of withdrawals and transfers, you can make per month

4.  Certificate of Deposit

A certificate of Deposit is one of the best bank accounts in Kenya with savings accounts but doesn't yield more interest. Definitely, it isn't a place you’d like to keep your savings. The average return is approximately 1 percent because of inflation which often surpasses 3% annually, likely you'll lose your money over time. 

Things to watch out for in Certificate of Deposit

·         You may incur fees if you withdraw your money before due

·         You will earn more interest in the Certificate of Deposit compared to the savings account but without a guarantee of accessing your funds whenever you want.