A personal account refers to a banking relationship that a single consumer establishes with a financial institution. While this term would normally apply to a checking or savings account, it can also be used to define a consumer loan, a credit card, or an investment as well. Under most circumstances, a personal account also has lower minimum requirements than other types of banking solutions. This allows a consumer to have benefits like free checks, no minimum balance, and an unlimited use debit card.
Although a personal account functions the exact same way that a business checking account or money market would, it is often offered with greater rewards and lower fees. For example, many business accounts require a company to have a high average daily balance in order to avoid check and deposit fees. Personal accounts do not have any of these limitations, and in many regions, they are offered at absolutely no cost to the consumer.
There are essentially two types of personal banking accounts: checking and savings. A personal checking account is designed for a consumer to be able to deposit his paycheck and pay monthly expenses without having to worry about transaction fees or other limitations. Most savings accounts are designed for a single consumer to place money to the side in order to earn a small amount of interest each month. Some savings accounts have minimum balance requirements and other stipulations, but on a personal account, they are normally set very low.
Money market accounts are a step above savings accounts, and they are offered by financial institutions to help raise their profit levels while granting a service to their personal account holders. For example, a person who has a savings account with a moderate amount of money in it may be personally contacted by an investment banker. This professional would explain that while a money market account has some fees and restrictions involved, it can earn considerably more interest.
Many banks also offer lending services to their personal account holders. Lines of credit help the financial institution make additional profit off of their clients, and many banks grant special promotions to personal account holders as an extra incentive. Some of the more popular features include no interest for a certain amount of time, reward perks, and free travel once the lending services are utilized to a certain extent. Personal loans are designed to help the consumer purchase items like vehicles and homes without going through a complex application process.