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(also called Statement Savings Account or Passbook
Savings Account)
Advantage
- This is a safe place to put your cash. The account
is usually insured up to $100,000.
- No fee is charged for deposits or withdrawals.
Disadvantages
- There may be a steep monthly maintenance fee
or a fee ($3.50 or more) for going under the minimum balance.
- Interest can be figured in many different ways.
- Because it is safe, you will receive very little
interest on your money and often may lose money when inflation and local,
state, and federal taxes are figured.
You can have a savings account in a commercial bank,
savings and loan, or credit union. If you decide to put your money in a
savings account, be sure the bank is insured by the FDIC. And, even though
it may be a bother, if you have a substantial amount in your savings account
(which may not be the best place for long-term money), check every month
to find the rate of interest and how it is being compounded. Things can
change quickly. Then check other banks that have attractive rates; you may
find the best rates at credit unions. If you can make more at somewhere
else, you may want to consider moving your money.
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