Banks offer many different options for savings and checking accounts. These options include a variety of benefits depending on whether the customer wants to save money and gain interest, or whether he wants a convenient checking account to make frequent withdrawals from. A passport savings account, also known as a flexible savings account, allow customers some benefits of both checking and savings accounts.
Definition
A passport savings account is actually a type of account that allows customers to access their money in the same way as a checking account, but with the added benefit of accrued interest. This allows the account holder to gain interest on money that they can also withdrawal for specific purposes. Typical requirements for a checking account, such as keeping a certain amount of money in the account at all times, still apply.
Withdrawals
A person with a passport savings account makes withdrawals, often by writing checks in the same way as a regular checking account. However, many passport savings accounts have limits on the number of checks that can be written per month. The account may limit free transactions to only five every month, and charge for every extra transaction, which can also limit the ways the account can be used.
Extras
Some passport savings accounts offer extra benefits such as debit cards, but not all do. Since the passport account sometimes allows only a few transactions per month, including a debit card would not be useful. Many passport accounts also require an extra annual fee for maintaining the hybrid account with both interest and withdrawal capabilities.
International Benefits
Some passport accounts indeed function in an international arena as methods to transfer money easily from one currency to another. The same rules of interest accrual and bill payment still apply, but the account is designed to be in a major international currency. An account holder can have several of these accounts, each in a different currency, and move money back and forth as required.
FSA
The passport savings account is also known as a flexible savings account, not to be confused with the FSA, or flexing spending account. The FSA is a work-related account that deducts money from a paycheck before taxes to help pay for medical expenses, and has no similarities to the passport savings account.