Savings account and the various types you can choose from

Many people use the savings account to deposit money that can be used for a rainy day. This is a kind of savings which is done mainly for accumulating interest and to prevent the money from being used for unnecessary purposes. Saving accounts can be opened with just a minimum amount of 20 dollars depending on the bank you choose. And you earn interest on the deposited balance irrespective of the amount of money.

Different types of Student’s savings account

A)  The Instant Access Student savings account facilitates flexible money transfer to the account for student transaction. The account can be easily accessed through internet thus allowing you to view your balance whenever you want and also enables you to swap your money easily. The one disadvantage associated with this type of account is that they provide rate of interest as compared to the other types of accounts.  

B)  Intro rate student’s savings account where the bank provides a higher rate of interest to you for a short span of time as an introductory offer encouraging you to deposit money with them.

C) Online Student Savings Account which can be easily accessed through internet. This is a virtual account which is fast and hassle free.

D) Minimum deposit student savings account – This type of account has a minimum deposit amount which you have to make every month but it provides you with higher interest rates for your pains. The banks are very strict about the deposits as even missing one payment once can cost you dearly as you are likely to receive less interest and in some cases no interest at all.

E) The Minimum Balance Savings Account where you have to maintain a minimum balance through out. The amount though depends on the discretion of the bank with which you open a student savings account. The accounts of this kind provides you with a higher rate of interest but similarly will penalize you by giving no or less interest in case of a dip in the balance below the minimum required balance that is required.

F) There is also a special student account known as the 529 Educational Plan Account can also be opted for since it allows you to save more without getting to pay the Gift Tax on it. This is, most often than not, opted by parents who would like to save for the child’s higher education.

Opening a savings account for student is very easy. While opening the account the bank will ask for a few documents such as the identity proof and age proof of both the student and his parents. ATM facility is available for quick and easy withdrawal. Also you don’t have to pay the IRS income tax on the earned interest. The minimum balance that is required to be kept is also very low when compared to the normal savings account and the regulations are a bit liberal also in case of deposits, thus giving growth opportunity to your money.