Types of bank account
Banks have different types of account that are all used by individuals and businesses for different reasons. A bank account is basically a financial agreement between the financial institution and the individual customer. The agreement usually for the customer to hold a credit balance with the bank and in return the customer gets the facilities of the bank account and interest if applicable. It is possible to arrange and account with a bank that allows you to go into a debt situation on your account (usually called an agreed overdraft). This usually involves some charges from the bank for this facility.
The different types of account all have different purposes and benefits for the customer:
Deposit accounts – deposit accounts are also known as current accounts and provide an account that has ease of access to funds. This account usually has a low interest rate.
- ISA accounts – individual savings accounts are tax-exempt savings accounts
- Savings accounts – savings accounts will let the customer deposit funds for a long period of time and be rewarded with interest added.
- Joint savings accounts – a savings account that can be held and accessed by two people.
A person would open the account that is most suitable for what they need from having the bank account. http://en.wikipedia.org/wiki/Bank_accounts
