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Which Type of Account Is Usually the Most Liquid?

Liquidity in finance by the book is how quickly any asset can be changed in to hard cash. Therefore, any account having only cash can be said as the most liquid. For instance, a checking or a saving account could be considered the most liquid accounts. Then follows the marketable securities like gold, properties etc.

For those who do not want reward checking accounts, the choices for a liquid bank account with the utmost yield is either a savings account, a normal checking account or a money market account. Unlike the reward checking account, these other liquid accounts do not call for any additional work. The only thing to be on the lookout for is an inactivity charge after one year.

It is always a good idea to keep a few bucks set aside in a liquid form. You never know when you might need it. But let us not forget that it is a two-edged sword for two reasons. One, it exhausts quickly and second, it earns lesser. If your life is planned and smooth enough to have fewer emergency situations, then you are certainly going to lose out on prospective for considerable earnings with liquid money. It would be better to start a simple savings account.

For a more aggressive income growth without missing the liquidity aspect, you can go for a money market account or a promising savings account with good returns. A savings account offering immense returns will evidently need you to sustain a specific minimum monthly balance. As per the recent data, the top three non-rewarding liquid accounts you can choose across the country entails the aforementioned three. Please read on if you want to know more about those accounts.

i. Money Market Account

Before online banking became rampant, the money market account characteristically offered superlative revenues for liquid bank accounts. These were usually tiered-rate accounts that delivered the best returns for huge balances. A nominal service fee every month was also levied unless you stuck to a minimum balance amount.

With virtual banks, there is no longer much discrepancy between savings accounts and money market accounts. Some savings accounts have no minimum balance prerequisites and certainly no monthly maintenance charges. Some savings accounts also provide you with a debit cum ATM card while some don’t. Also do your homework on the best interest rates available. You may need to show a better balance to get better rates though there are lenders that offer the same for smaller balances as well.

ii. Checking Accounts

Before, a normal checking account would not even be thought of as an option. It was always expected that a savings account or a money market account can fetch you the optimum interest earnings.

In the past couple of years, this notion has changed drastically. There have been a few lenders and credit unions that have presented highest rate on their checking accounts. But one must also note that these range of checking accounts slightly vary from conventional checking account. For instance, some banks insist on making deposits every month. And some do not allow online payment but insist on paper cheques as well as levy fine for accounts that dip below the specified balance.

iii. Savings Account

Saving accounts are accounts sustained by banks and other financiers that pay out interest but shall be utilized directly as cash in the slight sense of the exchange medium, like giving a cheque). These accounts allow clients to keep aside a part of their income or other assets while gaining a steady return. For the concerned bank, resources in savings accounts might not be callable instantly and, in some dominions, does not even sustain a standby obligation. They are generally used to give out as loans.

A classic savings account is customized to be simple and user-friendly. There are lots of options with no minimum balance amount specifications or service charges per month. Interest rates are too pretty straightforward but vary by taking various parameters like age, gender, income and location into consideration. There is just one interest rate that's good for all balances. The only way you can deposit and withdraw funds is to link the account to an outside liquid account. Then you can initiate ACH bank-to-bank transfers. There's no ATM card and no check writing. Banks at times opt to cut down deposit growth by bringing down rates.

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