A brief introduction to business and personal savings accounts

Savings accounts are generally of two different types. When the account is meant for individual use it is called a personal savings account. This is a private account which is usually accessible by just one or two people. A business savings account is one which is opened with an intention to cater to business needs if you own a company.

There were times when money used to be locked up in houses or safes with no potential for growth. There were also those groups of people who used to dig up holes to bury gold. But all that has changed with the introduction of institutions called banks. You can now invest your money and watch it grow at a steady rate with immediate access to your funds.

If you are an individual who is either self employed or working for an institution, a personal savings bank account is imperative for normal functioning in this country. You can keep your money safe and at the same time access it through ATM’s or the internet whenever you want. You will be promised a certain rate of return when you open the account and this rate will not change throughout the tenure of your account without prior notice. If you make periodic deposits into the account, you can build a healthy nest egg with which you can try and make better investments later on. The good things about savings accounts is that there is no minimum deposit requirement most of the times, unlike CD’s or money market funds where you are expected to invest a certain amount of money at the least. You can also get loans approved immediately if you have a substantial amount of money for a long period of time in the account.

A business savings account on the other hand can help you with your business needs. They provide great interest rates and at the same time you can be sure that your money is safe given the fact that it is FDIC insured. The FDIC is the federal deposit insurance corporation which insures all deposits up to a limit of $250000. When the market fluctuates and your business suffers, you can always rely on the interest from your savings account to make payments such as monthly bills, salaries or any other overheads. Again getting loans for new ventures can be very easy if you already have a good credit history due to a long standing relationship with the bank.