What Is A Personal Bank Account And Who Needs One

Written by admin, last updated March 19, 2019

Many people ask this question. A personal bank account is an excellent planning tool. Some people do not consider it an important investment, as they do stocks and bonds, especially when they begin planning, for futuristic purchases or retirement. Since most people only use their account for direct deposits or for cashing their checks, they have no idea how valuable their bank account is to them.

When someone plans to buy a home, a car, or some other major purchase he or she must come up with a plan if he or she do not have the money. While it may be beneficial for some people to borrow the money others may want to save the money their self. Borrowing the money means paying the lending institution or bank back with interest. However, if one decides to save the money their account will pay them with interest. The simplest way to start saving is by putting back at least 10{8e6cf663dd8bbfda1f4fdd38af84969e57c1756d87f56947f5c326d1d8b26fdc} of the paycheck or other income. This method works best for someone who already has direct deposit; therefore, opening up a saving account would be better than trying to save money with an existing checking account.

A personal savings account is preferable for someone who wants to save for large purchases or just for financial stability. Quite a few banks offer interest-bearing accounts with no minimal balance. Each bank has its own set rates when it comes to determining how much interest an account holder should receive. Interest rate varies, how much money the account holder receives depends on two unique factors, how much interest rate the bank is paying, and how much money is the account holder willing to put into the account. The longer the money sets in the account the more interest the account accumulates. People who want financial stability save their money for years. They save for retirement, to pay off debts, or just to have enough money to put with their monthly pension.

A personal account can be opened online, or in person. Opening an account online is quicker and less of an inconvenience. Since, there is no waiting in line, and no paperwork to pull out and produce, every form can be completed by memory. When a person opens up a personal account in person, much paperwork is required. The bank authority will ask for identification, usually a government issued identification card or a valid driver’s license. They also require a social security card and proof of address like a utility bill.

Opening a personal account can be a beautiful thing. Saving accounts are the perfect way to teach children the value of money. In addition, this is an excellent learning tool, as that teaches them how to invest in their future. Children grow up to become adults, and as parents it is our job to make sure they understand the principles of banking, whether they start at home with a piggy bank or at a local credit union. The concept is still the same; saving for the future.

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