What Types of Accounts Are Available at a Bank?

Banks provide a secure environment for managing money, offering diverse financial tools to help individuals and businesses save, spend, and plan for their financial futures. Understanding the various account types available allows individuals to select options best suited for their specific needs and goals.

Checking Accounts for Everyday Use

Checking accounts are primarily designed for frequent transactions and managing daily expenses, offering common features like a debit card for purchases and ATM withdrawals, online banking, and bill pay services. Many individuals also utilize direct deposit to receive paychecks or government payments directly into their accounts, which can sometimes provide earlier access to funds.

Banks offer standard accounts and interest-bearing checking accounts. While interest-bearing accounts offer a return, they often come with higher monthly service fees, averaging around $15.45, compared to non-interest accounts, which average about $5.47. To waive these fees, banks typically require maintaining a higher minimum balance, such as over $10,000, or meeting specific criteria like a certain number of debit card transactions or direct deposit activity. Other potential fees include overdraft charges and out-of-network ATM fees.

Savings Accounts for Future Goals

Savings accounts are foundational financial products intended for accumulating funds and earning interest over time. Their primary purpose is to help individuals set aside money for future needs, such as building an emergency fund or saving for short-term goals like a down payment. While they typically offer lower interest rates compared to other savings vehicles, they provide a secure place for deposits.

These accounts generally offer easy access to funds through online banking, mobile apps, and ATM withdrawals, though transactions may be subject to certain limits. Most traditional savings accounts come with low or no monthly fees, particularly if a minimum balance is maintained. Funds held in savings accounts at banks are federally insured up to $250,000 per depositor, per insured bank, by the Federal Deposit Insurance Corporation (FDIC).

Money Market Accounts and Certificates of Deposit for Enhanced Savings

For individuals seeking higher returns on their savings than a traditional savings account, money market accounts (MMAs) and Certificates of Deposit (CDs) present distinct options. Money market accounts blend features of both savings and checking accounts. They typically offer higher interest rates than standard savings accounts and may include limited check-writing capabilities or a debit card. However, MMAs often require a higher minimum opening deposit and ongoing balance, sometimes around $2,500, to avoid monthly fees or to earn the advertised interest rate.

Certificates of Deposit (CDs) are time deposits where a fixed sum of money is deposited for a predetermined period, known as the term, at a fixed interest rate. CD terms can range from a few months to several years, and generally, longer terms offer higher interest rates. The funds are intended to remain untouched until the maturity date; early withdrawals typically incur penalties. These penalties are usually calculated as a forfeiture of a portion of the interest earned, and in some cases, may reduce the principal amount. Any interest earned on a CD is considered taxable income, but early withdrawal penalties can be tax-deductible.

Retirement Savings Options

Banks provide avenues for long-term retirement savings through Individual Retirement Accounts (IRAs), which offer tax advantages. The two main types available are Traditional IRAs and Roth IRAs, each with different tax treatments.

Contributions to a Traditional IRA may be tax-deductible in the year they are made, and earnings grow tax-deferred until withdrawal in retirement, at which point they are taxed as ordinary income. Eligibility for tax deductibility can depend on income levels and whether an individual is covered by a workplace retirement plan.

Roth IRA contributions are made with after-tax dollars, meaning they are not tax-deductible. However, qualified withdrawals in retirement, including earnings, are entirely tax-free.

For 2025, the maximum contribution limit for both Traditional and Roth IRAs is $7,000, with an additional $1,000 catch-up contribution permitted for those aged 50 and older, bringing the total to $8,000. Eligibility to contribute to a Roth IRA is subject to income limits; for 2025, single filers must have a modified adjusted gross income (MAGI) below $150,000, and married couples filing jointly must be below $236,000 for a full contribution.

Business Banking Solutions

Beyond personal accounts, banks offer specialized solutions tailored for businesses. These business accounts help entrepreneurs manage finances, maintain legal compliance, and foster growth. Separating business finances from personal funds is crucial for clear record-keeping and liability protection.

Business checking accounts often feature higher transaction limits than personal accounts and may include services like treasury management and merchant services for processing customer payments. Business savings accounts allow companies to set aside funds for emergencies, future investments, or tax planning, often earning interest. Banks also provide online and mobile banking platforms, bill payment features, and robust fraud protection tools designed to meet the operational needs of commercial entities.