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Online Investing Hacks by Bonnie Biafore

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Hack #87. Choose the Right Type of Account

The type of account that’s right for you depends on the services you want, the returns you expect, and, in most cases, the taxes you would rather not pay.

Financial accounts boil down to savings accounts and investment accounts, but it’s hard to believe that when you look at the variety of accounts that financial companies offer. Savings options typically offer a trade-off between interest rate, safety of your principal, and access to your cash. Investment accounts boil down to accounts that provide only investment services and accounts that combine your investing and banking needs into one. The rest of the account options all stem from taxes or an investor’s desire to avoid them. Although the options are numerous, the right account is usually easy to spot once you know what to look for. If this hack doesn’t answer your questions, financial companies include helpful information on their web sites as well. In most cases, you can also talk to one of the company’s customer service representatives, who will be happy to help you make the right decision in exchange for your new or additional business.

Types of Savings Accounts

In the broadest sense of the word, the accounts that hold your stocks and other investments are savings accounts, because you’re saving money and then growing it to satisfy your financial goals. But that’s not what we’re talking about here. A savings account in most circles means an account that pays interest on the money ...

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