Putting your money under your mattress or in a safe won't do anything much. Your money will just be stored there until you use them. But putting your money in a bank account will do much. You will receive Interests, security and other benefits that your mattress and safe won't be able to provide.
There are several types of bank account that are commonly available in all banks. By knowing them, you'll be able to know which can reap you the most benefits.
Savings Account: This type of account lets you earn interest while keeping your money in the bank. By storing your money in the bank, you will be able to increase your profits without doing anything else. You can invest on this when you don't have a need of the funds in a short period of time.
Checking Account: Here, you will use checks to withdraw your funds. Checks have a favorable spot in the personal and business world as you can issue checks in purchases, bills and even gifts. You can also use the checks to transfer your money to other accounts. Understand that there are two types of a checking account that relates to interest. One is the regular checking account which unfortunately doesn't earn you interest. The other is the negotiable order of withdrawal or NOW earns you interest.
Money Market Accounts: This should not be mistaken with the money market funds. This type of account has higher interest rates than savings account rates. There are certain limitations for using this account which explains why you will be earning high yields. First , you have to deposit and maintain a certain denomination which is usually high and, second, the number of withdrawals are limited to only six times per month. Checks can be written only thrice a month and are considered withdrawals.
Certificates of Deposit or CDs: CDs have maturity dates which may take only thirty days up to ten years. Interest is earned during the term and is usually higher than that of the savings account. You can still withdraw the funds before maturity but you will be charged with an early withdrawal penalty so it's wise to wait for the maturity before taking out the funds. A few days before maturity, the bank will notify you about the CD and you have to confirm that you'll be drawing your funds out. If you fail to do that, your CD will be rolled over to another term.
Credit Union Accounts: A credit union is a non-profit financial institution that provides financial aid to its members. It provides accounts similar to deposit accounts. It offers share drafts, share accounts and share certificate which are actually equivalent to a checking, savings and certificates of deposit accounts, respectively.
Choose a bank account type which is right for you. Focus on your needs and match them with the features that are present in the accounts. You can use comparison sites to choose banks offering the best interest rates for their accounts. Once you have decided on an institution, it is best to contact them so you can learn about the different terms offered by the company.