The selection of a financial institution to bank with is determined by several variables that include the charges levied on customers. Towards this end, the California Bank and Trust offer the best facility regarding checking system with the account attracting a minimum balance of $50 and maintenance fee of $6. Again, the Wells Fargo savings account is the best option to set aside funds in since the facility has zero minimum balance requirements and a facility fee of 0.01%. Selecting the appropriate account is essential since it will affect the federal tax returns charges. The savings or checking account chosen is critical since it influences the costs placed on the customer which impacts the profitability of the engagement.
The California Bank and Trust is the best financial institution that will fit my personal banking needs due to the flexible facilities offered. Towards this end, the anytime checking account has the second lowest minimum balance that stands at $50 after the Navy credit union bank which has restricted membership (Anytime Checking, 2018). The annual fees used to maintain the account is relatively cheap with the charges amounting at $6 that is affordable. The Wells Fargo Bank has a package that requires $500 minimum balance and an account maintenance fee of $15 annually. Having analyzed the three banks the California Bank and Trust offers the most attractive package; thus it will be the most appropriate checking account fit. Current realities have informed the choice being a student which means the account should be flexible to learners that do not have much disposable income.
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The module includes a saving account element with the evaluation providing different packages. Towards this end, the Wells Fargo opportunity savings account has zero minimum balance that is attractive. Further, the account attracts a fee of 0.01% which is quite lows and affordable while the credit cards for the account attract an annual fee of zero percent (Interest Rates on Wells Fargo Consumer Accounts, 2018). In relation, the California Bank and Trust personal savings account to draw a minimum of $50 yearly maintenance fee while their credit card rates are pegged at zero percent. Comparison of the accounts on offer has shown that the Wells Fargo option is the best considering that the minimum balance is $50. As mentioned earlier, the Navy Credit Union has very competitive rates regarding their saving account, but membership to the institution is limited to service members and the families only(Personal, Secured, and Pledged Loans | Navy Federal Credit Union (2018).
The fluctuations of the market mean that interest’s rates tend to change dependent on several factors. To calculate the future value of money the following formula will be used to calculate the interest rate.
FV= P (1+rt)
. 5000=P (1 + 3 x 5)
5000 = P (16)
P = 5000/16
P = 312.2
5000 + 312.2
= $5312.2
The interest earned in the investment will be reflected in a particular manner within the federal income tax return. In this regard, the interest earned will be reported as ordinary incomes within the tax regime and calculated on current tax rates in the country. The analysis has shown that different financial institutions offer various banking packages which differ in the amount of money charged for multiple facilities. The California Banking and Trust provides the best checking account since the minimum amount charged by the entity is $50 while the maintenance fee stands at $6. On the other hand, Wells Fargo Bank has an attractive savings account since the facility has a zero minimum account balance and the maintenance fee is pegged at 0.01%. The selection of banking and saving account is vital since it influences the charges administered on the customer and the eventual profit gained in the financial institution.
