Checking
- associated with a debit card
- easiest to convert to cash
- used to pay credit cards
- typically earns low to no interest
- typically has no rewards/cash back
Institutions: Chase, Bank of America, …
Savings
- long term storage
- may have limits on withdrawal
- typically earns low interest
Institutions: Marcus, Chase, Bank of America, …
Certificate of Deposit (CD)
- guaranteed interest for a set period of time
- may have penalty for early withdrawal
Institutions: Marcus, Chase, Bank of America, …
Credit card
- make purchases through loan from the bank
- no fees as long as balance is paid on time
- pay balance using checking account
- earn rewards/cash back
- used to determine credit score
Institutions: Chase, Bank of America, Capital One, American Express, …
Brokerage
- buy and sell stocks
- trade options
Institutions: Fidelity, Charles Schwab, Robinhood, M1, …
Retirement
Traditional
- use post-tax money to buy but pay tax on earnings when sell
- no penalty to withdraw at any time
IRA
- use pre-tax money to buy but pay tax on earnings when sell
- lower contribution limit than 401k
- penalty to withdraw before age 59 1/2
Roth IRA
- use post-tax money to buy and pay no tax on earnings when sell
- lower contribution limit than 401k
- penalty to withdraw before age 59 1/2
401k (pre-tax/post-tax)
- offered through employer
- limited investment options
- higher contribution limit than IRA and Roth IRA
- penalty to withdraw before age 59 1/2
Institutions: Fidelity, Charles Schwab, Vanguard, …
