By Lanaya Haynes
What is a saving account?
A savings account is an interest-bearing account that allows you to safely save your money while earning a moderate interest rate. Also, they are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account.
What are the different types of savings accounts?
- Savings Deposit Accounts – Earns interest and allows you to withdraw money at any time with a limit of six transfers per month.
- Jumbo Savings Accounts – Same as savings deposit accounts but has deposits of $100,000 or more. The account may pay a higher interest rate on such large deposits.
- High Interest Savings Accounts – Has a higher minimum balance which in turn produces higher interest rates.
- Rewards Savings Accounts – Offer special incentives when opening accounts or reaching specific balance levels.
- Joint Savings Accounts – Savings account that is shared between two or more people. One advantage is that the FDIC ensures the number of owners on the account times the $250,000 insurance limit.
- Student Savings Accounts – Accounts that are offered to high school or college students usually with flexible terms such as lower minimum balance requirements.
- Certificates of Deposit (CD) – Accounts that require you to keep your savings in the account without touching it for a fixed period. Because of this, CD’s typically offer higher interest rate but if you withdraw before to allotted time you may have to pay a penalty.
There are still many more different accounts mostly those that are beneficial for special circumstances. These include college savings accounts (529 plans), individual retirement arrangements (IRA’s), roth IRA, 401(k) retirement plans, and health savings accounts (HSA’s).
Summary
All in all, there are many different types of savings accounts that can accommodate everyone’s needs. Whether you can have maintain a high minimum balance or a low minimum balance, have money to put away and not touch for a fixed period, or even want to save at a young age, savings accounts provide it all.
https://www.money-rates.com/basicguides/saving/types-of-savings-accounts.html
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