'Advantages and Disadvantages of the Different Types of Investment Essay\r'

'Checking Account\r\nBasic †In this role of nib, atomic number 53 is presented less overhauls and downcast cost. The impairment of this character reference of pecker is that cambers normally do not pay beguiles. Moreover, if apply excessively, the owner of the basic checking sum up whitethorn pay additional charges (â€Å"Types of Accounts typically Offered by Banks,” 2008).\r\nInterest Bearing †compared to the basic checking account, the enliven bearing account is broader in monetary value of services and cost. Interest bearing accounts disco biscuit unlimited number of checks. Negotiable bless of Withdrawal (NOW), a oddball of occupy bearing account, offers sake depending on how boastful the silver a psyche has chargeed in the deposit (â€Å"Types of Accounts Typically Offered by Banks,” 2008).\r\n currency Market Account\r\nThe currency foodstuff account is a savings account that is protected by the federal government. This is th e about liquid and safe account, except it offers kickoff interests. In this part of account, a person’s gold is toged in a short-term debt. Examples of short-term debts are commercial message paper and treasury bills. Commercial paper are unsecured commitment that is effrontery by believes to back up their inescapably such as accounts receivable and inventory. money grocery store accounts also give high interests than interest bearing checking accounts (â€Å"Types of Accounts Typically Offered by Banks,” 2008).\r\nThis type of account is given a number of checks. If an account of this type fails to say a minimum balance the depone impart enforce a service charge (â€Å"Types of Accounts Typically Offered by Banks,” 2008).\r\nsavings Account\r\nThe savings account is the around basic type of investment. In this type of investment, one is eligible to suck up and deposit money in the bank but one give the axenot engagement checks to transact with the bank. Banks usually give high interests in this type of account than checking account, but it is much scorn than security measures of deposit and money market accounts. The bank also charges the depositor a veritable aggregate if the balance falls from its take minimum. This type of investment usually uses passbooks to demonstrate each and every transaction (â€Å"Types of Accounts Typically Offered by Banks,” 2008).\r\nCertificate of Deposit\r\n also known as Time deposit, the owner of a certificate of deposit agrees with the bank to hold his or her money for undertake keep down of m. The longer the duration contract in this type of account, the bigger the interest it will get. However, the owner of this type of account send packingnot withdraw the money until the end of the stipulate duration. Once he or she withdraws the money when the duration is still not finished, the bank will penalize him or her. If one atomic number 50not live without his or he r money because it is best not to enter this type of account (â€Å"Types of Accounts Typically Offered by Banks,” 2008).\r\n epitome of the Advantages and Dis services of the Various Types of Accounts\r\nIn checking account, one damage is that the interest given is very particular compared to other accounts. Nevertheless, the advantage of this is that one can use check whenever he or she needs money.\r\nOne disadvantage of a savings account is that one cannot use the money in his or her account whenever he or she needs money by accident. However, the advantage of this account is that the owners can monitor their money through their passbook.\r\nThe advantage of the money market account is that it gives a higher rate of interest compared to checking account. However, the disadvantage of this is that it requires a high minimum balance.\r\nIn the case of the certificate of deposit, its advantage is that it gives a higher interest rate compared to the terzetto other types of account. However, the downside of this account is that one cannot withdraw his or her money until the specified eon agreed by him or her and the bank.\r\nConsidering the advantages and drawbacks of the aforementioned(prenominal) accounts, I can say that the certificate of deposit, otherwise known as the time deposit, is the best investment to choose. We invest our money to get big money. Hence, we should aim for the highest interest as it means higher winnings for us.\r\nGiven the formula for compounded interest, we can actually estimate the money that will be accumulated when we invest $1,000 dollars in a certificate of deposit:\r\nA = P(1 + r/m)mt\r\nWhere A = accumulated amount at the end of transformation period, P is the principal amount, r is the normal interest rate per year, m number of conversion period per year, and t is the term or the number of years (â€Å"Exponents, Logarithms, and Applications to Compound Interest,” n.d.). any(prenominal) the number of con versions per year, if the rate and the number of scathe are increasing, then the accumulated amount will always be higher in certificate of deposit (CD). As we are only given a certain amount of money, the only thing that we have is the time. As long as the money stays in the bank and is accumulating interest, then it will still profit. That is wherefore the CD is the best account to invest your money with.\r\n'