Different Types of Deposit Accounts

This is the 2nd post in the Bank Deposit Account 101 series. 

I explained how to open a deposit account in an earlier post but didn't get to mention in detail about what sort of accounts are available. To make it up to y'all, the following is a list of the 4 most common bank deposit account types. Don't blindly pick something to throw your money into. Understanding how each one functions will hopefully help you maximize profit and minimize fees and inconvenience. This information should also be factored into the bank you ultimately decide to open your account at.

Checking Account is the most common deposit account. Like its name suggests, this type of account allows you to write checks and withdraw money easily. It is usually tied to a debit card. Because of these features, a checking account is the most liquid form of deposit accounts and, in general, does not bare interest. In the past year or so, in order to make up for loss profits from government regulations, many checking accounts require a minimum balance to avoid maintenance fee or to receive certain services.

Good Bye, Merrill Lynch

Back in May, I managed to save up 6 months of living expenses for an emergency fund, so I looked to open an online self-directed individual trading account to get some trading experience (and maybe some extra income). I searched for online discount brokerage firms with low fees by looking at Sharebuilders, Scottrade, E-Trade, etc. In the end, though, I settled on Merrill Lynch.

This wasn't because Merrill Lynch was ranked the highest by reports or provided the best services. The main reason was because I do a majority of my banking with Bank of America. After being bought by Bank of America in mid-2008, Merrill started advertising a $0 equity trading program pretty agressively in 2009. Of course, $0 comes with some restrictions. You need to have at least $25,000 combined in your deposit accounts at Bank of America (savings, checking, CD's, etc.) and you can only trade free for up to 30 trades. Otherwise, the price structure is based on your deposit total, with the highest fee being $8.95 per trade.