The classic – the current account for everyday use
The checking account, or, as it is often called in abbreviation, the account, is practically inevitable. Since cashless payment transactions have displaced the wage bag, a checking account is required for the everyday things in life. Payment transactions are made via a current account. This means transfers, either credit or direct debit. The current account is a “current account”, which means that you can access your money at any time. Depending on the provider, account management fees may apply. On the other hand, credit interest is sometimes credited. People of all ages can open a checking account. Minors too, but with a parental consent form. On the way, an EC card or credit card ensures access to the checking account, which can be used to withdraw cash from ATMs.
Savings accounts for wealth creation
Savings accounts have higher interest rates than current accounts, but often have notice periods. This means that you cannot access your money overnight. With the popular savings book, for example, there is a (at least) three-month notice period. Until then, you can withdraw 2,000 USD a month, but not more. Generally speaking, the longer the notice period, the better the interest on a sum of money. Fixed-term deposits have a particularly long term, where there is only a notice period in exceptional cases. Accordingly, the interest rate is more attractive here. The interest rate is fixed, as is the term. If there is any possibility of accessing the money invested, this is associated with fees. In most cases, this means considerable financial losses and makes the time deposit unattractive as a short- or medium-term investment. There is often also a minimum investment amount.
Fixed-term deposit account and daily account for different goals
There is no multi-year term in the call money account. As the name suggests, you can access your money here at any time. In return, the interest on call money is correspondingly lower than that on time deposit; however higher than with the current account. The risk, if you will, is interest rate fluctuations that can occur daily, so the yield on a call money account also varies. In addition, a graduation is common: less interest is gradually paid out on a call money account. However, an account for fixed-term deposits and overnight money are the same in two respects: Interest is often paid quarterly or annually and there is statutory deposit insurance. There is a six-digit deposit guarantee in the area of overnight money, and seven-digit deposit money.
Other account types: business account and custody account
Business accounts are often a must for entrepreneurs. So you can easily separate private money movements from business money movements and calculate the business profit without any problems. The advantages are sometimes offset by high account management fees. Alternatively, an online business account is sometimes offered free of charge. Not all accounts are used to store money: custody accounts are used to store and manage securities. A security deposit is mandatory for all types of bonds.