Checking & Savings Accounts Explained in 3 Minutes — Transcript

Full transcript

1. 0:00this is Sarah Sarah just turned 18 and
2. 0:03is ready to get her first job she has
3. 0:05everything she needs a well-written
4. 0:06cover letter reliable transportation and
5. 0:08a wallet to keep her brand new debit
6. 0:10card but first she needs to get a debit
7. 0:12card to do that Sarah has to open her
8. 0:14first checking and savings accounts
9. 0:16before she does though she has a
10. 0:17question what's the difference between
11. 0:19the two what is a checking account
12. 0:22a checking account is the most common
13. 0:23type of bank account they're designed to
14. 0:25ensure people like Sarah and you can
15. 0:28easily access their hard-earned money
16. 0:29most modern checking accounts come with
17. 0:31a standard set of features like personal
18. 0:33checks and or debit card direct deposit
19. 0:36abilities for paychecks and other
20. 0:37payments online features like bill pay
21. 0:40and account to account transfers
22. 0:42with a checking account Sarah can write
23. 0:43checks make purchases online and in
24. 0:45store with their debit card and withdraw
25. 0:47from an ATM anytime she needs cash as
26. 0:49long as she has money in her account
27. 0:51there's no limit to the number of
28. 0:52transactions she can make every month
29. 0:53however some checking accounts also have
30. 0:56downsides mainly fees these may include
31. 0:59maintenance fees for keeping the account
32. 1:00open fees for not maintaining a minimum
33. 1:03balance and overdraft fees
34. 1:05since these fees vary between Banks
35. 1:07Sarah can easily choose an account that
36. 1:09comes with few or no fees overall
37. 1:11checking accounts are the best basic
38. 1:13account for Sarah to manage her everyday
39. 1:14finances what is a savings account but
40. 1:17Sarah doesn't just want to deposit her
41. 1:19paychecks into her bank account she also
42. 1:21wants a place to set money aside for
43. 1:22future needs like her emergency fund and
44. 1:24a down payment on a house to do this
45. 1:26Sarah will need a savings account
46. 1:28savings accounts are specialty accounts
47. 1:30designed to encourage you guessed it
48. 1:32saving to start federal law places a
49. 1:35maximum on the number of convenient
50. 1:36withdrawals that savings account holders
51. 1:38can make each month currently six these
52. 1:41include account to account transfers ATM
53. 1:43withdrawals and paying bills plus most
54. 1:46banks don't issue debit cards attached
55. 1:48to savings accounts because of these
56. 1:49limits Sarah will be less tempted to
57. 1:51take out the money she's already saved
58. 1:53but if the account is so restricted
59. 1:54what's the point it's all in the name
60. 1:56savings savings accounts are well known
61. 1:59for offering interest on deposited funds
62. 2:01in the last two decades savings account
63. 2:03interest rates have hit historic lows
64. 2:05nationally around just 0.06 percent but
65. 2:09some specialty savings accounts like
66. 2:10certificates of deposit and money market
67. 2:12accounts offer higher rates for meeting
68. 2:14certain saving goals or leaving your
69. 2:16money alone for a longer period of Time
70. 2:18online only savings accounts may also
71. 2:20pay higher rates of Interest as online
72. 2:22banks have fewer expenses and when
73. 2:24National interest rates go up the
74. 2:25interest rate on savings accounts tends
75. 2:27to go up too savings accounts may also
76. 2:29come with fewer or no fees especially
77. 2:31compared to some checking accounts
78. 2:32though you may still have to maintain a
79. 2:34minimum balance checking for savings
80. 2:36which is better so to recap checking
81. 2:38accounts are for depositing and spending
82. 2:40while savings accounts are for saving
83. 2:41but which is better generally neither
84. 2:44people like Sarah often rely on both a
85. 2:46checking account to deposit paychecks
86. 2:47and pay bills and a savings account to
87. 2:49set aside money for the future so Sarah
88. 2:51could potentially earn more money than
89. 2:53investment account her bank's savings
90. 2:55account comes with insurance to protect
91. 2:56up to 250 thousand dollars for money
92. 2:58that's a guarantee you can't find in the
93. 3:00stock market and when you need to pay a
94. 3:02rent or go grocery shopping she has her
95. 3:03debit card hooked up to her checking
96. 3:05account and ready to go now that Sarah
97. 3:07and you better understand checking and
98. 3:09savings accounts she's ready to go sign
99. 3:11up hopefully she'll make some smart
100. 3:12spending and savings decisions for the
101. 3:14years to come if you like this video
102. 3:16then please subscribe hit the like
103. 3:18button and comment your thoughts below
104. 3:19together we can make the world a
105. 3:21wealthier place