Wednesday, March 22, 2023

What Type Of Bank Account Is Best For Everyday Transactions

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A cash PIE is an alternative to a savings account. Theres usually a minimum deposit required but you get access to your money while earning interest. A PIEs main advantage is you pay a lower rate of tax on the interest you earn depending on your income.

Generally PIEs suit those on higher incomes. If you earn between $48,000 and $70,000 your tax rate for savings will be 30%. If you earn more than $70,000, youll pay 33% on your savings. PIEs have a maximum tax rate of 28%, so youll end up with more money in your pocket.

What Types Of Bank Accounts Should I Have

The type of bank account you choose to open will depend upon your own personal situation and financial goals.

It is a good idea to know which type of bank account is best for everyday transactions and which ones may be more suited for other purposes such as retirement or charitable giving.

The following is a list of 6 different types of bank accounts and what purposes they are meant to accomplish. Each type of account and each bank may charge varying fees that you should keep in mind We will be covering the range of fees for the various types of accounts.

At the end of the article weâll also share insights about a new kind of Giving Account from Spiral banking services¹, which is designed to make it easy for Spiral customers to make charitable donations to causes.

Scotiabank Student Banking Advantage Plan*

The Scotiabank Student Banking Advantage Plan is an attractive no-fee account for students that sweetens the pot by earning you your choice of SCENE or Scotia Rewards points on your debit purchases. This means that for every $5 you spend, youll get 1 point in either program, essentially monetizing your everyday spends. While the earn rate isnt as good as youd get through a credit card, its a nice extra to have, especially on a no-fee student account. The welcome bonus of 5,000 SCENE or Scotia Rewards points, if you sign up before April 30, 2021, is worth around $50, depending on your choice or redemption.

The nuts and bolts of the plan will make many students happy: no monthly fee, unlimited debit transactions and Interac e-Transfers, overdraft protection, access to a massive network of over 4,000 ATMs. The Scotiabank Student Banking Advantage Plan offers up a lot of perksall for free.

  • Monthly fee: None, as long as youre enrolled in a post-secondary institution
  • # of transactions: Unlimited
  • Interac e-Transfers: Unlimited
  • Extras: Earn SCENE or Scotia Rewards points on debit purchases free paperless or paper statements Apple and Android mobile banking apps
  • Service charges: None

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The Best Bank For Seniors: Scotiabank

Bank accounts for seniors are typically available for those aged 60 and older, offering a pared down set of features with the monthly fees waived. All five Big Banks offer seniors accounts with very similar features, but Scotiabank edges out the competition by allowing account holders to earn on their debit card through the Scotia Rewards or Scene+ program. Seniors receive a discount on all Scotiabank accounts and/or they can use the Basic Bank Account for free. This account includes 12 free monthly transactions, free Interac e-Transfers and overdraft protection.

What To Look For

How do I add an expense transaction to my account?

Check that your account offers:

  • A competitive interest rate that could grow your money quickly
  • Any promotional interest rates, which may give you a higher interest rate for a limited period
  • Any bonus interest rates, which may give you a higher interest rate if you dont make withdrawals for a certain time, or if you deposit a minimum monthly amount.

You can find out more about our savings products here.

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What Is A Demat Account

A DEMAT account is a short form of ‘Dematerialized Account‘. It is a type of bank account that allows customers to keep their shares and other electronic format securities. This mainly helps in facilitating easy trade and conducting stress-free transactions for shares and bonds. There are two different depository organizations in India, which manage and maintain DEMAT accounts. They are Central Depository Service Limited and National Securities Depository Limited.

The following are some other features of the DEMAT account:

  • DEMAT accounts allow trading from anywhere, allowing traders to work from any location.
  • Transaction cost charged by the bank on the purchase of shares and bonds is comparatively low.
  • Reduced paperwork is required to transfer securities.
  • Users can easily open a DEMAT account with KYC .

What Is A Checking Account

Checking accounts are easily accessible and are used frequently for everyday transactions, such as transferring money or writing checks. To make transactions convenient, checking accounts usually come with a debit card, checkbook and mobile app with payment features, such as Zelle, for sending money to other people, even if they bank elsewhere.

The downside, however, is that banks typically dont pay interest on money in checking accounts. As a result, money in checking accounts doesnt grow.

When shopping around for a checking account, there are three key features to look for:

  • No monthly maintenance fees .
  • Free access to a large ATM network.
  • No or low overdraft fees.

Its also worth finding out if a new account sign-up bonus is available. You may be able to earn $100 to $500 or more, when you open a checking account and set up direct deposit.

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At Finder, we’ve been comparing bank accounts for more than a decade. Using the product data we’ve collected, ongoing consumer testing, customer surveys and many account comparisons, we’ve assessed accounts based on a few key features that we know you care most about to bring you our picks.

You can see what we’ve considered when choosing the top pick for each category below.

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But Finder may receive compensation when you click links on our site. Learn more about how we make money from our partners.

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How Do Bank Accounts Work

How a bank account works depends on the type of account you open . Having a bank account enables you to store your money safely while being able to complete essential, everyday transactions such as paying your bills, making online and in-store purchases and being paid any wages.

For example, current accounts provide everyday banking services such as receiving your salary, making cash withdrawals and paying bills. Conversely, savings accounts are designed for the sole purpose of giving you an account to deposit money and earn interest.

Its also good to know that all registered banks, building societies and credit unions in the UK are backed by the Financial Services Compensation Scheme . This means your deposits are protected, so you should be able to claim back the money you deposited into your account in the event the financial institution fails. You can claim up to £85,000 per person, per banking group, or up to £170,000 for joint accounts.

How Do You Describe Transactions In Accounting

Every accounting transaction has to follow the dictates of the accounting equation, which states that any transaction must result in assets equaling liabilities plus shareholders equity. For example: A receipt of cash from a customer result in an increase in cash and a decrease in accounts receivable .

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Types Of Bank Accounts

Different types of bank accounts serve different needs. Its wise to put money into the best account type for your financial goals so you get access to the right tools for spending and saving. Doing so allows you to maximize the return from your bank, minimize fees, and manage your money conveniently.

Most banks and credit unions offer the following account types:

  • Savings accounts
  • Retirement accounts
  • Money Market Account Tips

    Reconciling Bank Account Transactions
    • Use money market accounts as emergency funds or a place to park money for larger financial goals . Dont access the money for other purposes to ensure that its there when you need it.
    • If you cant find an affordable money market account, look at online-only banks and cash management accounts, which are typically low-cost options.

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    How To Find The Best Bank Account For You

    Consider the following features when researching your options to help you find the best bank account for you.

    The account fees

    It’s ideal to look for a bank account with no monthly account keeping fees. If there are account fees, ask yourself if there are any extra features with the account to justify the fee.

    The deposit conditions

    If there are monthly deposit conditions to meet, make sure it’s an amount that you’re comfortable with.

    The account access options

    If you like to bank in branch, the best bank account for you will likely be one that has branch access as some online banks don’t. Or, if you do all your banking on your phone, check that the bank account can be accessed via a good mobile banking app.

    Overseas fees and charges

    If you like to travel regularly, the best bank account for you could be one that doesn’t charge overseas ATM fees and international transaction fees.

    The linked savings account

    If you’re planning to open a linked savings account with the same bank, it’s a good idea to look for one with a competitive interest rate.

    Payment options

    Make sure the bank account offers the payment options that you want, for example BPAY, Apple Pay, Google Pay, Samsung Pay, PayID, tap and go with Visa payWave or Mastercard PayPass.

    ATM access

    If you use cash and cheques, a bank account with a large ATM network and smart ATMs that accept cash and cheques might be best for you.

    Whats The Best Type Of Bank Account For Me

    The best account for you will depend on what you plan on using it for, so its important to identify what you value in your banking experience.

    This table highlights the type of bank account that may be right for you depending on your situation:

    If youre a

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    Lifeline And Second Chance Checking Accounts

    Lifeline accounts are streamlined checking accounts designed for low-income customers. These accounts typically have low balance requirements and no monthly fees. Basic features like check writing are included, but you may be limited to a certain number of transactions each month. Large banks offer these accounts to provide banking services to the broad public and some states require banks to offer them.

    Another type of account is a second chance checking account, which may be a good option if youve been turned down for a checking account due to a past banking mistake or bad credit. These accounts typically have monthly fees that cant be waived, and you may be required to set up direct deposit and/or complete a money management class. Despite these limitations, these accounts are often better in terms of fees and convenience than using prepaid debit cards and check cashing services.

    Debit Versus Credit Cards

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    When you use a debit card to pay for things, you are spending the money in your account. If there’s no money in the account, you can’t make a purchase.

    When you use a , you are borrowing money, which you will have to pay back with interest.

    Using a debit card is less risky than using a credit card, because you can’t run up a debt.

    Some debit cards are ‘dual network cards’, which means you can also use them as a credit card. If you do use your debit card as a credit card, you can be charged high interest. You might end up paying more than you would on a regular credit card.

    If you are switching from a credit card to a debit card to avoid debt, make sure your debit card does not have a credit option.

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    How Can I Improve My Credit Score So I Can Open A Bank Account

    If you want to improve your credit rating and gain access to credit, there are some steps you can take to improve your credit score, such as the following:

    • Ensure youre enrolled on the electoral register. This is one of the ways banks verify your identity, and if you havent already enrolled, that might explain why youve been rejected for a bank account. You enrol on the electoral register here
    • Where possible, aim for stability. For example, banks are likely to find you more financially attractive if youre employed rather than self-employed
    • Ensure that you consistently pay all your bills on time
    • Space out credit applications, as too many in a short period of time can damage your overall score
    • Financially disassociate yourself from anyone with a low credit rating, or who has experienced financial difficulties. This is because their score can sometimes affect yours. You can do this by getting in touch with credit agencies.

    Drawbacks Of Savings Accounts

    The major drawbacks of savings accounts are:

    1. Limited Transactions

    The main drawback of savings accounts compared to checking accounts is that they limit the number of transactions you can make each month.

    You can make as many deposits as you like since banks love those, but most banks only allow six withdrawals or transfers to other accounts. If you go over this limit, the bank hits you with a fee thats typically between $5 and $15.

    At most banks, this cap doesnt apply to ATM and teller withdrawals, but some banks put limits on those as well.

    2. Low Interest

    Although savings accounts pay interest, they dont pay that much. According to ValuePenguin, many large banks pay only 0.01% APY on savings accounts literally pennies per month.

    Other types of accounts, such as CDs and money market accounts, usually offer better returns.

    3. Debit Card Not Included

    Unlike checking accounts, most savings accounts dont come with a debit card you can use for purchases. Thats probably a good thing because you can only make a limited number of transactions anyway, but it does make it a little harder to use your money.

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    What Is A Bank Account

    The term âbank accountâ usually refers to a standard transaction account used to store money electronically with a bank or other financial institution. One person sets up a bank account in their name and uses it to deposit money into.

    Money can either be deposited as cash or transferred electronically from another account. Similarly a bank account usually comes with a card that can be used to withdraw cash from an ATM or make EFTPOS payments with.

    The Best Big Bank In Canada: Scotiabank

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    All of Canadas Big Five banks offer customers stability, a broad portfolio of financial products, and the convenience of thousands of physical bank branches and ATMs. That said, Scotiabanks money-saving flexibility is rare, and its why weve picked them as the best large-scale bank for Canadians.

    In terms of everyday banking options, Scotiabank has five different types of accounts each with perks and benefits designed for Canadians at any stage of life. Customers under 18 years of age and students enrolled in a post-secondary institution can apply for a no-fee account. For adults, Scotia offers four options that balance banking needs and benefits, from the minimal Basic Banking Account with its fee of $3.95 per month, right up to the perk-laden Ultimate Account that earns you rewards and credit card rebates, among other benefits, for $30.95 monthly in fees.

    Individually, these accounts are on par with other Big Five offerings, but Scotiabank will reduce or waive fees entirely with bundled services. The Ultimate Package, for example, includes everyday banking with unlimited transactions, the ability to earn Scene+ points, a boosted savings interest rate, an annual fee waiver for select credit cards, free trades on Scotia iTrade, and a welcome bonus of up to $300 cash. Thats a lot of banking perks, but it gets even better. Those who maintain a minimum of $5,000 in chequing or $30,000 combined with the Momentum Plus Savings account dont have to pay the monthly fee.

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