After getting your new bank account you may come across the term non transaction account. Have you ever wondered what is a non transaction account? If so, then let me clear the doubt and explain the term in simple language.
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What does non transaction account mean?
A non transaction account is also known as a non payment account. This is an account which does not handle frequent transactions. Non-transaction accounts can only have limited transfers or it can have waiting periods before withdrawing funds. Let me share with you non transaction account examples.
Let’s say you wanted to pay someone but the payment was returned because it was a form of non- transaction account. In this condition, the money was returned because the bank does not allow transactions from non-transaction accounts because this account can be a savings account, bonds, CDs or IRAs.
There are 3 types of non- transaction accounts such as:
- Fixed-Term accounts:
Fixed-term accounts help investors recoup their principal investments at the end of a specified period or fixed term. So, this money cannot be used for transactions. Some examples include CDs and bonds.
- Retirement investment account:
Accounts such as IRAs are made for retirement savings, not transactions. Money cannot be withdrawn from retirement accounts and if it is withdrawn before the age of 59 ½, you will need to pay a 10% penalty fee.
- Savings account:
Savings accounts are designed in a way to save money and they are not made for transactions.
This was all about what is a non transaction account in a nutshell. I hope you like it.
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What is a non transaction account?
Rita
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2022-10-17T12:13:51+00:00 2022-10-31T07:59:15+00:00Comment
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