Transaction Accounts Demand Deposits- payable on demand whenever the depositor chooses Checking Account - most common form; offers customers quick access to their money and a convenient way to pay bills or transfer funds to other institutions.
Checking Accounts Basic- Offer a few simple services for minimal cost Interest bearing checking- Pay interest on the balance deposited in the account, but usually a minimum balance is required
Time Deposits Less liquid than check deposits Examples include: Savings Accounts Money Market deposit accounts Certificates of Deposit (CDs)
Savings Accounts Banks usually limit the number of free withdrawals. Statement Savings Accounts: Provide a quarterly statement detailing account activity, including fees and interest earned. Lower interest rates than other time deposits because it is the most liquid
Money Market Deposit Accounts MMDAs offer a higher rate of interest than savings accounts, but they usually require a higher initial deposit to open an account. FDIC insured up to $250,000 Minimum balance usually required # of Transactions may be restricted
Certificates of Deposit CDs are certificates offered by the bank that guarantee payment of a specified interest rate until a designated date in the future (maturity date). Higher the amount and longer time until maturity = higher interest rates Usually higher than money market accounts and savings accounts
Assignment In groups of 3, research the various types of transaction accounts and time deposits offered at a bank in your area. Provide details about each type of account Research should be summarized on a flyer, or brochure.