Financial literacy is essential to achieve wealth and prosperity and life. Unfortunately, not all aspects of financial literacy are taught in schools. Especially when it comes to managing money. Most young people learn how to do banking by trial and error. Which is a problem when you consider that banking is as essential as breathing air. Business Columnist Chris Muller suggests that “ Finances can be a blessing and a curse for young people, but knowing the basics is the best way to prepare for what’s to come. Banking is the first step in your financial journey… Although getting a bank card is a big part of financial success, it’s by no means the end of what you need to know.” Here is a quick summary of bank accounts you should familiarize yourself with when managing your money:
I. Checking Accounts:
Checking accounts are the most heavily-used type of accounts by individual consumers. This is because checking accounts are designed to facilitate frequent or quick financial transactions. Checking accounts usually feature services such as ATM withdrawal, check-writing, cash deposits and recurring bill payments. The bells and whistles that come with checking accounts are intended to help people use money often, without actually handling physical cash.
II. Savings Accounts:
A savings account is a type of account which is designed to hold money that is rarely accessed. Depositing cash into a savings account usually means that you can wait for a long period of time before needing to use that cash for personal reasons. Unlike checking accounts, saving accounts usually come with more restrictions in terms of how liquid your money is. Banks discourage people from withdrawing money in savings accounts by levying fees or imposing transaction limits.
III. Retirement Accounts:
Retirement accounts are an even stricter kind of savings account. As indicated by their name, retirement accounts are bank accounts intended to help people save for retirement. But unlike regular savings accounts, which allow cash withdrawals every now and then, retirement accounts specify that withdrawals should only happen when people reach retirement-age. Anyone who tries to withdraw money from a retirement account in advance, risks facing heavy fees and taxes.
IV. Certificates of Deposit:
Usually abbreviated as CDs, certificates of deposit or a banking investment which offers higher interest rates than ordinary savings accounts. Certificates of deposit are designed to hold certain amounts of cash from consumers, for a fixed number of months. Certificates of deposit usually require expensive down payments, but they actually provide a safe way to grow money as long as you’re willing to wait out the full term on the certificate.
Understanding how to transact through banks is a skill that no human being can live without. This is because it’s virtually impossible to deal with money without putting it in a bank at some point or another. The more money you accumulate over time, the more you should understand bank accounts, and all the various other services that banking institutions provide. Learn how to transfer or save money without accidentally losing liquidity. If you like what you just read from our blog, you’ll love the various informative courses, workshops and events listed on our websites and social media. Whether you’re interested in personal development, or overall improvement of your business, give us a call at 1 (888) 823-7757 to find out how The RISE Academy can help you break past your daily struggles and start soaring in success. Exclusive offers are also available on our new site nowrise.com