Types of Savings Accounts in Canada
It goes without saying that whenever people think about saving, the first thing that comes into their minds is savings accounts. After opening a chequing account, a savings account is the next biggest thing that account holders think of. As a part of having a good personal financial plan, having a savings account is very important. Unlike a chequing account, a savings account allows you to save that extra cash and gives you easy access to the saved funds in times of emergencies.
A chequing account provides for short term daily expenses such as paying bills whereas a savings account provides for mid term and long term financial goals. A savings account helps an individual save money for near term objectives such as establishing emergency funds or even going on a vacation. This article will shade some light on types of savings accounts available in Canada
1. Regular Savings Accounts
In Canada, almost all banks offer a regular and basic account that individuals can sign up for. You can sign up for this particular account in person, online or by phone. A regular savings account is different from a chequing account. Savings account holders are not allowed to have cheque-writing privileges. The only catch with this account is that it may require a higher opening balance. The account is easy to set up and maintain. Account holders are allowed to link their regular savings accounts directly to their chequing accounts. By so doing, accounts holders are allowed to move money between the two accounts much more easily. Some of the benefits of this account are that it allows you to earn a small amount of interest and you are not charged any fees.
2. Combined Chequing and Savings accounts
The account holders allow you to earn a small amount of interest even though it is usually less than the amount earned in a regular savings account. The amount earned however is slightly more than what you'd earn in a chequings account. With this account, account holders are allowed to write cheques but at a higher cost. You also get your interest quickly and easily.
3. High interest rate savings account
Just as the name suggests, you get to earn high interest rates than in any other kind of savings account. To run the account, you need to have a certain minimum balance in your account. Account holders are not given the privilege of owning a cheque book. At some times, it is difficult to take money out of your account without affecting the high interest returns.
- Interest Rate
- Monthly Cost