Explore various savings account types including basic, online, money market, and CDs. Learn how these options can help grow your savings through interest earnings, offering flexibility and security. Ideal for disciplined saving and reaching financial goals.

Comprehensive Overview of Savings Account Options

While checking accounts handle daily expenses, they typically don't accrue interest. Savings accounts are designed to help you grow your money by earning interest on your deposits.

Types of Savings Accounts
There are various options available to meet your financial goals:

Basic Savings Accounts
Offered by most banks and protected by the FDIC, these accounts are suitable for saving funds. They often require a minimum deposit and have limited withdrawal features, making them ideal for accumulating savings rather than frequent transactions.

These accounts prioritize saving over everyday spending.

Some may permit limited check writing. The interest rates are generally modest, around 0.06%.
Online Savings Accounts

Provided by both traditional and online-only banks, online savings accounts often feature higher interest rates due to lower operational costs. They generally have flexible minimum balance requirements and are managed online or via phone.

Interest rates for online savings accounts can surpass 1%, especially on larger balances. Both standard and online accounts may offer higher yields based on deposit size.

Money Market Accounts
These accounts allow banks to invest deposits in securities like treasury notes, municipal bonds, and CDs. They usually require higher minimum balances. Funds are FDIC-insured and can generate better returns, with current APYs around 0.85% as of 2017.

Certificates of Deposit (CDs)
These are fixed-term deposits earning interest until maturity, ranging from one month to five years. Withdrawing early typically incurs penalties. Rates are higher than standard savings, averaging near 0.79% APY, with online banks offering up to 2.30% on longer terms.

Automatic Savings Plans
Set up recurring transfers from your checking to savings accounts. This helps you build savings steadily for goals like trips or emergencies. Although returns are modest, these plans promote disciplined savings and financial security.