Some banks issue passbooks to their savings account customers to help them keep track of their account transactions and get updates of the current balance. The popularity of passbooks has dropped since the invention of automated teller machines (ATMs) and online banking. Nevertheless, some bank customers still prefer the safety and ease of traditional passbooks over monthly statements by mail.
Passbook Entries
A bank teller uses a printer to make entries on your passbook any time you visit the bank. The passbook is used to record details of the transactions, such as the amount of money withdrawn or deposited, interest earned during particular time periods and the current balance.
Bank Transactions
Passbook savings accounts are most suitable for customers who wish to deal in person with a live bank teller in a traditional brick-and-mortar setting. Nowadays, this type of bank account attracts mostly customers who conduct relatively small numbers of transactions, such as children. For added convenience, you may still want to have access to this account using an ATM card.
Design
Designed to fit into shirt pockets and purses, the passbook is usually small and thin. It may be even smaller than a U.S. passport. It shows your name and account number. If you have a low frequency of transactions, you can conveniently keep track of years of account activities in a single passbook.
FDIC-Insured Deposits
The passbook savings account is one of the safest and simplest ways to save up your extra cash. Through the Federal Deposit Insurance Corporation (FDIC), the federal government insures up to $250,000 in bank account deposits. Before opening an account, you can use the Bank Find online database or call toll-free 1-877-ASK-FDIC to make sure your bank is FDIC-insured.
Interest Yield
Besides preserving your original principal, you can expect to get a small interest yield on your passbook savings account. The interest rate of a passbook savings account tends to be lower than that of a high-yield savings or money market account. Bankrate.com provides free online comparison of the interest yields of different FDIC-insured banks.
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