Bank Accounts

Bank accounts are records of a customer’s transactions and his or her financial position within a given bank. When the account has a credit balance, it means that the bank is indebted to the customer. An account with a debit balance, such as a mortgage or overdraft facility, is the reverse of this. An account intended to hold credit balances is generally referred to as a deposit account, while one opened for debit balances is known as a loan account.


Before you open a bank account, you’ll need to make a decision on what type of account you need. You may discover that you need multiple accounts to carry out your personal business. Certain types of bank accounts, especially savings accounts, require that you keep a minimum amount of money on deposit at all times. For some other types of account you may be charged a fee for the privilege of using the bank’s services.

Banks offer a wide variety of savings and money market accounts to help make your money work for you. Most offer Certificates of Deposit, which are great for long term planning, but which carry lower interest rates than regular savings accounts. You can compare the different types of deposit and loan accounts available at your local banks, from checking accounts to premium savings to children’s accounts: the list is almost endless.

Your bank accounts should reflect your personal spending and saving styles. You may need a flexible savings plan or a checking account with a debit card if you need easy access to your funds. Banks also offer goal-oriented savings plans, such as for retirement and college, where you may be required to deposit a fixed sum at specified intervals. Once you decide on the type of account you need, find out what the requirements are for opening an account. These may include government-issued picture identification such as a passport or driving license, a utility bill to verify your address, and a letter from your employer.


If you’d like to open a deposit account, you first need to create a realistic savings plan. Weigh your income against your expenses to see how much you can afford to save monthly. Note that in order to be able to save, you must be spending less money than you earn. These bank accounts keep your money safe and help it to grow, since they pay interest. Your savings account should be able to cover your monthly expenses in case you lose your job or you have an accident or similar situation where you cannot work for a few months.

Your local banks may also offer credit card and loan accounts. These carry debit balances, and you will be obligated to make periodic payments to reduce the balance. Compare the interest rates, fees and rewards programs carefully before making your final selection. In many cases, the interest rates on loans are much lower than on credit cards, so you should consider taking a loan for smaller purchases like electronics and furniture, as well as the big ticket items such as a home or a vehicle.

In short, you need to be aware that there is no bank or financial institution exists that would perfectly match every individual. Before choosing a bank, compare the interest rates on both deposit and loan accounts, including credit cards. You should also compare fees and look at the different features and benefits. Finally, look into technological options such as mobile and online bank accounts, which make it easy for you to manage your money remotely.