Have you ever heard of a share account? Perhaps you did not hear about it. Actually, it is a type of saving account which easy to operate like any other savings bank account. Investors must have a share account to conduct their transaction during investment.
Therefore, the primary purpose of opening a share account is to collect interest and dividends from the investment. It is pretty similar to the Demat account, which offers paperless investment and transactions. Usually, such a type of account has many more types.
Before you open a share account, make sure you know about everything about it.
It refers to the saving account, which has a strong association with credit unions. At every interval, the share account offers interest to investors. Even dividend is also credited into such share account yearly. Therefore, it is like any other bank account which offers ultimate safety, and for this reason, there is no worry to keep high value in this bank account.
Moreover, if you want to get a credit union membership, you must open a share account. Only after that will you enjoy all the other facilities like taking out loans for the unemployed in the UK. With these loans, they can invest money in shares, getting benefits of insurance, etc. If you think that a share account is an entirely different type of account, you are wrong.
Instead, a share account is something that is almost similar to any other bank account, but the term is quite different from others. As the entire account opening process and financial assistance come from credit unions so, such a new name has come into existence.
Moreover, you need not worry about frequent withdrawals and payments. It is like any other savings account, which always offers you liquidity. You can make a withdrawal at any time and deposit money. Therefore, it is not difficult to understand that a share account is not a bank operating account. Instead, the operating authority is a credit union.
Share Accounts operation
As credit union is the financial intermediary here so, the operation procedure is quite different from banks. Generally, government and private institution’s owners open such share account under credit union. The financial intermediary offers so many rights to an account holder.
At each financial year, there organises a voting camp where every account holder needs to vote. Besides, a credit union management manages this voting facility. The main reason for such a voting camp is to elect a group of qualified people as a board of directors.
Although sometimes financial intermediaries become biased while providing customer service, there is no question of discrimination here in credit unions. Whether you are a large company owner or a small business entity, it hardly matters. Credit union treats every single account holder equally.
Besides, there is insurance coverage too on your deposited money. FDIC ensures the safety of deposits. It offers protection of up to 250000 pounds. This clearly indicates that if a person keeps up to 250000 pounds, then it is entirely safe. Nevertheless, you should also remember that every credit union do not come under FDIC insurance.
However, there is a vast difference between a share account and a shared account. Generally, what shares account means, where the ownership of the account remain typically individual. However, it does not mean that there is no provision of the joint account. One can even open jointly handled share accounts too.
Different types of a share account
There are various types of share accounts. When you visit a credit union office to open a share account, you will find all these different types of accounts. Nevertheless, how can you choose your suitable one without knowing anything about it? Here we will discuss briefly such accounts.
Share Draft Account
This type of account does not impose any limitations during the transaction. Usually, business owners open such accounts for the purpose of various transactions within a month. Besides, if you need to pay money each day, you may open a share draft account without any doubt.
For people who utilise all the payment methods regularly, then do open such an account. Moreover, there is no worry while keeping money in this account. If you hold more than 250000 pounds, it comes under the coverage up to only the mentioned amount.
Share Savings Account
Unlike any other savings account, such a credit union account also offers interest on the deposited amount every year. However, this rate of interest may vary from time to time. Therefore, if you want to earn more rate of interest, then keep more amounts into the account. Besides, you may also invest money in Certificate of Deposits (CD) or invest in shares, bonds etc.
You must remember that most share saving accounts do not provide the facility of debit cards, so you may have to use either online transactions or need to use cheques while withdrawing money. However, utility bills are easy to pay through a share savings account.
Retirement Share Account
If you wonder how a retirement account can become a share account, then you need to know that this type of account also offers the facility of investment. So, on that note, both of them have a connection. The primary purpose of a share account is to invest money and earning a good amount of return.
While investment is the ultimate requirement, IRA is the best way to invest money. Generally, several superannuation plans come up for people who would like to open a retirement account through the credit union. So, without thinking much, open a retirement share account.
The purpose of saving money is to spend the fund to fulfil financial needs. Therefore, if you want to buy a car and look for car finance for the unemployed, then apply to direct lenders without any worry. They will offer loans to the unemployed with a minimum rate of interest. Besides, do not forget to choose an investment account from any of the above mentioned.