Opening a saving account is one of the financial security strategies that you should consider. Savings can come in handy when facing a financial crisis or funding an investment. Therefore, if you do not have a savings accounts, you should consider opening one today. However, before you open a saving account, you should research to find the most suitable one for you. Different financial institutions offer an overwhelming number of savings accounts such as Traditional vs Roth IRA thus deciding on the most suitable one for your needs can be a difficult task. With information regarding the different types of savings accounts, you will be able to make an informed decision. Here are some of the common types of saving accounts offered by the bank.
Deposit saving account is one of the accounts that are available in all the banks and credit unions. Since it is offered by all banks and credit unions many people have it, and some of the things that you need to know about it include FDIC protection, interest earnings, and stable value. Additionally, with a deposit savings accounts you will realize that there are transactions limits, but you can access your money immediately. A basic savings account is ideal for people who want to keep their money safe while it earns small interest. The fact that you can access your money immediately does not go well with individuals who desire to save for many years before withdrawing the money.
The other types of savings accounts that you should consider are IRAs. Under Individual Retirement Arrangements, you have two options; Traditional vs Roth IRA. In the case of traditional IRA, you can make a tax-deductible contribution of up to $6,000 if you have attained the age of 50 years. One of the advantages of this type of IRA is that the earning are not subject to taxation except income tax during withdrawal of any amount. On the other hand, a Roth IRA has the same contribution limit as traditional IRA, but the contributions are not tax-deductible. If you click here, you will discover more between Traditional vs Roth IRA.
The third type of saving account that you need to learn about is money market savings accounts. When it comes to interests rate, the figure can be similar or higher than that of deposit savings accounts. However, you can only make six transactions every month. At the bottom of the list is jumbo savings accounts. It is the type of savings account that enjoys the highest interest rate. Always compare the interest rates before depositing money in a jumbo savings account. From the above discussion, you now understand the difference between many savings options such as Traditional vs Roth IRA.