A. Savings accounts don’t usually pay interest on the
money you deposit.
B. Savings accounts may require you to maintain a
minimum balance to avoid paying a fee.
C. Savings accounts are best used to store money for
D. Savings accounts limit the number of withdrawals
that can be made each month.
Option A. (Savings accounts don’t usually pay interest on the
money you deposit) is the false statements about savings accounts.
Actually savings account pay interest on the money you deposit, even savings account gives more interest then current account.
Types of savings accounts
Mainly at present there are 6 types of savings accounts, these are
- Traditional Savings Accounts: Traditional savings accounts are the most common and straightforward type of savings account. They are typically offered by traditional banks and are known for their ease of access and low-risk nature. These accounts often have low minimum balance requirements and also provide low interest rate typically less than 1% . They are a suitable choice for individuals looking for a safe place to park their money while maintaining liquidity.
- High-Yield Savings Accounts: High-yield savings accounts are similar to traditional savings accounts but offer a key advantage, a higher interest rate. These accounts are frequently provided by online banks or credit unions. The increased interest rate allows your savings to grow at a faster pace, making them an attractive option for individuals who want to maximize their savings’ potential.
- Certificates of Deposit (CDs): Certificates of Deposit, or CDs, are time-bound savings accounts. When you open a CD, you agree to keep your money deposited for a specified period, ranging from a few months to several years. In return, you receive a fixed interest rate that is typically higher than that of regular savings accounts. CDs are ideal for individuals with a specific savings goal and a willingness to lock in their funds for a set duration.
- Money Market Accounts: Money market accounts are a hybrid between savings and checking accounts. They typically offer a higher interest rate compared to regular savings accounts and provide limited check-writing privileges. Money market accounts are offered by banks and credit unions and are an excellent choice for those who want a balance of liquidity and interest earnings.
- Cash Management Accounts: Cash management accounts are financial products provided by brokerages or financial institutions. These accounts often combine the features of a checking account, savings account, and investment account. They offer competitive interest rates and are ideal for individuals who want to manage their cash while having the opportunity to invest excess funds in various financial instruments.
- Specialty Savings Accounts: Specialty savings accounts encompass a wide range of account types designed for specific purposes. These accounts can include educational savings accounts, health savings accounts (HSAs), and retirement savings accounts like IRAs. They come with unique tax advantages and are tailored to help individuals save for particular life events or financial goals.