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By: Ikedi Ani-okoye

Should You Open a Passbook Savings Account?

Before the rise of depositing money, and money markets savings accounts, people often used Passbook Savings Accounts, to increase their money. This was the way that people saved, for college education, retirement fund and for down payments on houses and cars. All the transactions were written in a book.

Comparing passbook saving with internet savings

Setting up a passbook savings account is very simple. The only thing that needs to be considered was the conditions and terms, as well as the fees that need to be paid to a bank. The opening of a passport account, just requires visiting the bank who can set it up for you.

Comparing passbook saving with internet savings there are still many consumers, who prefer to have passbook savings accounts, rather than use telephone banking, ATMs and online banking. Many banks to issue passbook accounts to customers. Although many have been replaced with modern savings type accounts.

There are two benefits, that you can get from a passbook savings account. The first benefit, is the ability to withdraw money wherever you want, from any ATM machine. The money in passport accounts, is only usually used by banks to lend it to businesses, and to make mortgage payments, and this decision is made cautiously.

The main disadvantage, from using a passbook account, is inflation, as these accounts usually give back a low interest rate. This means that the interest that has been earned, does not usually keep up with inflation. This account, will usually only give you a small percentage of interest back compare to other accounts also.