A passbook savings account is a special type of savings account. It differs from a standard savings account because it uses a passbook – a written log of your transactions.
Passbook accounts can be a great option for people opening a bank account for the first time, as well as savers looking for ways to stop spending money. These traditional savings accounts often offer competitive interest rates, as well as other benefits such as the ability to easily transfer money from a checking account. But is a passbook account right for you?
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What is a passbook savings account?
Passbook accounts are offered by a limited number of banks. They require you to use a passbook in order to record deposits and withdrawals. A passbook is a physical book in which you keep a written record of transactions.
Traditionally, before the days of online banking, passbook accounts were common and using a physical ledger was the only way to track money coming in or going out of your account. Customers recorded deposits and withdrawals in their passbook to track their balance.
Most people no longer use a physical passbook as it is widely considered more convenient to simply track your account balance online. But some banks continue to promote passbook accounts as an alternative that gives you more hands-on control over managing your money.
Typically, with a passbook account, account holders cannot use a debit card to access their money through an ATM or to make deposits into the account. Instead, you will take your physical passbook to the bank and complete your transaction with a teller while recording the amount of money you have put into or withdrawn from your account.
Passbook savings accounts are insured by the Federal Deposit Insurance Corp., can be linked to online checking accounts, and often come with competitive interest rates as well as low monthly fees or no monthly service fees .
If you prefer to track transactions manually with pen and paper, or want to create an extra barrier to accessing your savings so you’re less tempted to withdraw cash, they could be your account choice. ideal savings.
Do some banks still use passbook savings accounts?
Although passbook savings accounts are no longer common in the age of online banking, some financial institutions offer them. Here are three examples of banks that offer passbook accounts.
Cathay Bank offers a passbook savings account with a competitive variable interest rate of 0.03% to 0.05%, a low minimum deposit and automatic transfers between accounts. You will have unlimited cashier service with your passbook account and can also check your account details via online or mobile banking in addition to using your passbook.
Here’s what you need to know about your Cathay Bank account.
Cathay Bank Passbook Savings Account Basics
Cathay Bank has offices in California, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Texas and Washington,
Dollar Bank provides an FDIC-insured passbook savings account, charges no monthly maintenance fees, and allows you to easily transfer money from a check. The annual percentage return is also competitive at 0.03% and you only need a deposit of $25 to open the account.
Here are the details of the Dollar Bank passbook account.
Dollar Bank Passbook Savings Account Basics
Dollar Bank has offices in all 50 states and in Washington, DC
Bank of the First Republic
First Republican Bank offers a passbook account with no monthly service fees, a competitive rate of 0.05% to 0.25% and an online view of your account balance. Although the minimum deposit is higher than competitors, you can rest assured that your money is safe with FDIC insurance.
First Republic Bank Passbook Savings Account Basics
First Republic Bank has offices in California, Connecticut, Florida, Massachusetts, New York, Oregon, Washington and Wyoming.
How to open a passbook savings account
To open a passbook savings account, you must first find a bank that offers one. The banks above are a good place to start, and you can also check with smaller local banks and credit unions to explore options.
Once you find a bank that provides access to a passbook savings account, you will need to meet their minimum deposit requirements. The minimum deposit can be as low as $25 or as high as $500 depending on your financial institution.
Many banks allow you to open a passbook savings account online, but you may need to provide some personal identification information, including your driver’s license number as well as your social security number and whether you wish to open an individual or joint account.
Once your account is opened, the bank provides you with a physical passbook that you will need to manage your money.
How to withdraw money from a passbook savings account
In general, you cannot withdraw money from a passbook savings account through an ATM. You will need to visit a bank branch with your passbook and work with a teller to make your withdrawal. When you withdraw money from the account, it should be recorded in your physical passbook.
While having to go to a teller to complete a transaction may seem inconvenient, this is a feature of passbook accounts that many people appreciate.
You will benefit from personalized banking services during your visits to the counter and will be able to obtain in-person support for the management of your account. Having to go the extra step of going to the bank can also discourage you from withdrawing money from your savings if you don’t need it.
Passbook Savings Account FAQs
Is a passbook savings account safe?
Passbook savings accounts are safe as long as you open one with an FDIC-insured financial institution. Many banks offer this type of account with FDIC insurance protection up to legal limits.
Which banks have a passbook savings account?
What is the current interest rate for a passbook savings account?
Current passbook savings account rates may vary depending on the bank you select as well as your account balance. You may be offered a rate as low as 0.03% or as high as 0.25% APY, but you usually need a larger account balance to get the most competitive rates.
At the end of the line
A passbook savings account is a traditional alternative to modern banking, but still offers many of the same benefits as any other type of financial account. Opening a passbook account gives you the benefit of having a physical record of your transactions, as well as the ability to access your account information online. You will also benefit from competitive savings rates.
If you want to be able to view your transaction history on paper, a passbook account might be exactly what you’re looking for. But a passbook account isn’t the only way to maximize your savings efforts. To get the most out of your savings, be sure to explore high-yield savings accounts with no minimum balance requirement and do the research to find the best savings accounts for your needs.
Disclaimer: All rates and fees correct as of April 23, 2022
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