One of the things you do not need to open any of the savings accounts available, is good credit. While a history of good credit is required for many other things such as auto loans, mortgages and credit cards, banks do not run credit scores on individuals who open savings accounts.
All you need is money.
What Types of Savings Account Are Available
There are five basic types of savings account. However, each of them can have many variations even within the same financial institution.
Fixed Rate Savings Account: These are characterized by low yields but high flexibility when it comes to access to your money.
Special Savings Account: These would be holiday accounts or special accounts for seniors or students. These offer a higher yield. However, they may have minimum balance requirements or other restrictions.
Money Market Accounts: Money markets typically offer higher yields than traditional savings accounts. They also allow you write checks on the money as well as do ATM withdrawals. In exchange for the high yields, there are usually restrictions on the number of monthly withdrawals that are allowed. You may also have to open the account with more money and have to maintain a higher minimum balance than on regular savings accounts.
Certificates of Deposit (CDs): These have high yields. However, you must keep your money in the account for a set period of time to attain it. Usually anywhere from six to thirty-six months.
Online Saving Accounts: These accounts, which have proliferated, offer the same types of savings accounts as do their brick and mortar counterparts. They are also insured by the FDIC. They usually have higher yields because of the lower expense of maintaining an online bank as opposed to a brick and mortar institution.
Savings Account Search
While you don’t need good credit to open a savings account, the ability to do good research to find the right account will help you place your money in the right financial vehicle.
You can check out deals (and they are out there!) at your local banks, savings and loans, credit unions or online banks.
In fact, savings account terms vary widely. So, it is a good idea to really do your research on financial institutions in your area or from online sources to find the right one for you.
Once you are fully informed about your options (including all savings account vehicles), you can make the best choice for your financial situation.
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