Advantages & Disadvantages of a Passport Savings Account
A passport savings account combines the advantages of a checking account with the advantages of a savings account, making it a good choice for many savers. Like a checking account, the passport savings account provides unlimited monthly transactions and the ability to schedule automatic payments. But a passport savings account typically has a higher interest rate as well, helping you make the most from your idle cash.
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No Transaction Limits
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Money market accounts often impose limits on the number of transactions account holders can do per month. Passport savings accounts do not impose this limit, making them more suitable for everyday use. It is important to check the fine print carefully before opening a passport savings account, since each account has its own rules.
Scheduled Payments
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Like checking accounts, passport savings accounts offer you the ability to set up automatic monthly payments. This allows you to quickly and easily pay your bills each month, including utility payments, credit card payments and other bills. If you have online access to your passport savings account, you can log on and adjust your monthly scheduled payments.
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Low Interest Rates
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Even though a passport savings account generally pays a higher interest rate than a comparable checking account, that interest rate can still be quite low. A passport savings account is a good place to park money you expect to need in the short-term. If you have a lot of money to invest, it is a good idea to seek out higher interest alternatives like certificates of deposit.
Monthly Fees
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Some passport savings accounts do charge monthly fees, so it is important to check the fine print on the account carefully. If the passport savings account does charge a monthly fee, that fee could eat up any interest you receive. Many banks offer free passport savings accounts, so there is no reason to pay a monthly fee to get the account you need.
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References
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