Banks offer personal banking services like savings, mortgage loans, and credit cards. Thus, you need to know the available resources and options to make sound financial plans. Otherwise, you may not pick the best option. Explore three personal banking services and solutions to consider in your financial objectives.
1. Personal Loans
Personal banking allows you to take loans and repay them later. You may need a loan for different activities such as business, private, and educational purposes. Some of the personal loans that banks offer include:
Debt consolidation loans. If you can secure a new loan with less interest, you can use the new loan to pay off a previous debt. As a result, you get out of the first debt faster and free up space on your credit cards.
Credit builder loan. You rebuild or gain credit for the first time with a credit builder loan. When you pay in good time, your credit score rises and opens you up to other financial opportunities.
A personal line of credit. The loan gives you access to a line of credit up to a preset amount you can borrow whenever you need. The bank then charges the interest on the outstanding balance and not the preset maximum amount.
Deposits are personal banking solutions that allow you to deposit your savings and earn interest. Typical deposit solutions include:
Savings account. If you have a definite cash flow and want to save, personal banking savings lets you maintain a minimum amount in your account. You can deposit and withdraw funds anytime, but banks restrict the number of withdrawals.
Fixed deposit account. The funds you put in a fixed deposit account stay in the account for a longer time and attract higher interest. Nonetheless, if you encash the amount before maturity, you will receive a lower interest than the initial agreement.
Recurring deposits. The recurring deposit personal banking option lets you save a fixed monthly amount for a preset period. You receive the deposit with interest on maturity though you can close the account before maturity.
Personal banking investment is where you participate in the stock market. As a result, you earn money faster than you would with a deposit or savings account. Some investment options to consider are:
Mutual funds. A mutual fund lets you buy shares and own securities alongside other investors. The investment is affordable and has relatively low account minimums and managerial costs.
Money market account. Like a savings account, the money market helps you set aside funds, but you can access the money via debit cards and checks. Some banks may limit transactions or enact penalties to encourage you to save.
Personal banking offers many solutions, services, and investment opportunities. Yet, you can only benefit from the options if you have detailed knowledge of each service. Whereas the above list is not conclusive, the article presents insights to probe further research.