When it comes to opening an account at a bank, you might be more familiar with the standard savings account. Are you aware that banks also offer current accounts and fixed deposit accounts as well? Let's examine the differences between these three accounts to find out which bank account is right for your needs:
The main purpose of a savings account is to help you save and build up reserves, which is why it allows your savings to earn interest over time. It also allows for flexibility in managing money on a daily basis, since you can make deposits and withdrawals anytime.
If you're running a business and need to make frequent monetary transactions, a current account suits your needs the most. While it may or may not earn you interest depending on individual products, a current account gives you the most freedom and ease to conduct inbound and outbound transfers, with a variety of credit functions including cheques.
Fixed Deposit Account
Are you thinking of saving up a larger sum of money for a mid- to long-term goal such as retirement or your child's education? In this case, a fixed deposit account may be right for you. With a fixed maturity and more attractive interest rates than a normal savings account, a fixed deposit account allows you to plan ahead for the future. However, this also means that you will not be able to withdraw from your fixed deposit account before your maturity date without incurring some loss in interest.
There are other conditions to be aware of. Before opening a bank account, do find out about the following:
|Savings ||Current account ||Fixed deposit |
- Minimum deposit to open an account.
- Interest, how it's calculated and when it's credited.
- What fees or charges apply?
- Minimum balance required. What charges apply if amount falls below minimum balance?
- What withdrawal limits apply at branch or ATM?
- Minimum account holding period. What penalties apply if account is closed earlier?
- Is the deposit automatically rolled over on maturity date?
- What if withdrawal is made before maturity? What penalties or charges apply? Is interest still payable?
- Are there charges for cheques?