Three types of useful bank accounts to make your savings work better

Depending on your goal, it should be your savings account

If you have a regular job within a company or business, it is very safe to be paid by check, payroll or deposit as the case may be, for which you may manage a simple bank account with the management of a debit card that only It serves to have your money in a more effective and accessible way.

But if you want to save or that your account offers you returns, there are three types of options to do so that we take up from the advice of USA Today. Keep in mind that these suggestions are for a specific purpose, whether it’s to create an emergency fund or for your retirement.

1. Checking account

Although these types of accounts do not generate income by themselves, they have become a basic financial service for millions of workers, because in order to receive your income, in many cases you need to have an account to which you can deposit or in which you can take your money everywhere through your debit card and without the risk of carrying cash.

“Checking accounts are designed to be a cash flow manager,” says Chrisanna Elser, founder of the financial website ThefinU.

Even to achieve your savings goals more easily, having an account of this style allows you to program a certain amount each time to be transferred to another in which you can collect money.

2. Savings account / emergency fund

We must all acquire the habit of preventing ourselves financially in the face of any type of misfortune, so an emergency fund through a savings account will not only allow you to collect money for an incident, but will also make it pay for a year or a certain period. according to the contract of the type of service you use.

Although it is intended for an unforeseen situation, you should also consider that many of these services can penalize you for making withdrawals outside the time stipulated in your contract.

If an emergency occurs that can be solved with your own income at the moment, it is best to leave your savings account intact so that it continues to generate interest in your favor.

Although for savings there should never be a limit, set yourself the goal of achieving savings similar to one month or three months of income, and then extend to an adverse financial situation of six months in which you can access it and pay your bills. bills and debts without worry.

3. Retirement savings account

A 410(k) plan retirement account or an individual retirement account (IRA), as their names imply, are specific financial savings services for a long term after many working years.

You can never consider any of these options as a type of emergency fund, because the restriction periods are long, so regardless of whether you have a savings account, you should consider it as one on a par with your checking account.

According to USA Today, both 401(k)s and IRAs allow your money to grow tax-free. However, since these types of services are specifically intended for long-term performance, early withdrawal penalties can be very expensive, not to mention that you may very well have to pay IRS taxes when using that money.

The best way to start your retirement account is by making a scheduled transfer at least once a month. We recommend that you have an annual savings goal and divide it into 12 months to have the value of your goal deposit to that account.