How Savings Accounts Work And The Different Types
A savings account is typically a fully taxable low-yield bank instrument, but money is extremely liquid and FDIC insured.
A savings account is either a Passbook Account in which records of deposits, withdrawals and interest are stamped and recorded in a booklet, or Statement Savings whereby the consumer receives a quarterly or monthly statement showing deposits, withdrawals and interest activity.
We used to say savings accounts were suitable as a learning tool to teach children about banks and saving, but grownups were too big for this ride. However, linked savings accounts are a different story.
Linked Savings Accounts are linked to a personal checking account, and money to or from the saving account is electronically transferred at customer request. These often pay much high interest than old style account.
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