What are the different types of commercial bank accounts?


There are several types of commercial bank accounts, some of which have related purposes but have different conditions attached to them. An example of such an account is the well-known savings account, which has the same purpose suggested by its name. The checking account is another familiar addition to commercial bank accounts, which is fundamentally different from a savings account. Other types of commercial bank accounts include money market accounts and certificates of deposit.

When listing commercial bank account types, the savings account is one of the account types that comes to mind. This type of account is usually created for bank customers who want to save some money and also prevent their money from sitting idle. Idle money is a term used to describe any kind of money that does nothing but stay wherever it has been placed, for all intents and purposes this money does not increase in value. By putting their money into a savings account, individuals can at least guarantee that the money will earn some form of interest, with the exact rate determined by the bank in question and other monetary and fiscal policies. Some banks may also have policies that oblige their customers to maintain a certain limit on their savings accounts, at the risk of incurring some sort of monetary penalty.

Current accounts are other types of commercial bank accounts that allow account holders more immediate access to their money. This is due to the fact that current accounts are often reserved for expenses, including checks. Basic checking accounts offer no interest for deposits, while interest-bearing checking accounts offer depositors some form of interest, with the exact rate depending on a number of factors. A regular checking account usually has a maximum number of checks that the owners of those accounts can issue. On the other hand, interest-bearing current accounts do not have such restrictions.

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Money market deposits are a different category of commercial bank accounts that convert the depositor’s balance into items such as treasury bills and commercial paper. These accounts do not start earning interest until a certain balance is reached. Certificates of deposits refer to types of commercial bank accounts that involve some sort of agreement or arrangement with the bank to leave money in an account for an agreed period of time. The longer the money is kept, the higher the interest.

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