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Types of bank accounts for your financial needs

Compare seven types of accounts that can help you manage your money.

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By

Cassidy Horton

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Choose a type of bank account

Bank accounts can go a long way in helping you reach your financial goals — whether that goal is to spend or save money. Here’s a breakdown of the five main types of bank accounts, so you can decide which is best for your needs.

1. Checking accounts

A checking account is designed for everyday spending, as there’s no cap on the number of deposits and withdrawals you can make each month. You’ll typically get a checkbook and a debit card so you can write checks or use your card to make purchases and withdraw cash on the go.

Most checking accounts don’t earn interest, but more and more interest-bearing options are starting to pop up. Perhaps the biggest drawback of a checking account is overdraft fees, which you may face if spend more money than you have in your account.

2. Savings accounts

As its name implies, a savings account is designed for saving. You earn interest on the money you keep in the account, but you typically won’t get an ATM card or checks. You’re also limited to six withdrawals a month per Regulation D.

3. Money market accounts

Think of a money market account as a savings/checking account hybrid. You get the benefits of a debit card and the ability to write checks, but you also earn the same competitive interest rate as you would with a savings account. On the downside, money market accounts are typically limited to six withdrawals a month and they may require deposits of $500 or more to get started.

4. CDs

With a certificate of deposit, you agree to lock your money away for a set period of time (usually anywhere from three months to 10 years). In exchange, you get a fixed interest rate that won’t change even if rates drop.

The only catch is that you can’t withdraw your money before your CD matures. If you do, you’ll pay early withdrawal penalties.

5. Retirement accounts

There are several different types of retirement accounts, such as 401(k)s and Traditional and Roth IRAs. Depending on the plan you use, you may gain access to tax breaks, employer matching and other special benefits to help you grow a sizeable nest egg for retirement. But there’s typically a yearly contribution limit, and you may pay penalties if you need to access funds early.

6. Brokerage accounts

A brokerage account is an investment account designed to buy and sell investment products, including stocks, exchange-traded funds (ETFs), mutual funds and bonds. Open a brokerage account with an investment firm, which can then place trades on your behalf. Some full-service brokerage accounts also offer personalized service and financial advice through a financial advisor.

7. Cash management accounts

With a cash management account (CMA), you can spend, save and invest in one fell swoop. CMAs have similar features to checking accounts and may come with an ATM card, a debit card and check-writing capabilities. They also function as a savings account by offering competitive interest rates.

And since nonbank providers, such as brokerage companies, generally offer cash management accounts, you may also be able to invest in securities using the same account.

VIDEO: Which bank account is right for you?

Compare different types of bank accounts

This table highlights the major differences between the five types of bank accounts:

Checking accountSavings accountMoney market accountCertificate of deposit (CD)Retirement account
Best forThose who want a basic spending account to pay bills, transfer funds and make purchasesThose who want to earn interest on their savingsThose who want a checking and savings hybrid that earns interest but is accessibleThose looking for a short-term investment with a locked in interest rateThose who want to save and invest for retirement
Earns interest
Monthly fees
Minimum deposit$0 to $25$0 to $100$2,500 to $10,000$500 to $10,000Varies
ATM access
Checkwriting
FDIC or NCUA insured
Withdrawal limits
six a monthsix a monthCan’t withdraw until maturityCan’t withdraw until retirement age

Things to consider when choosing the type of bank account for you

Here are a few features to keep in mind when finding the best type of bank account for your needs:

  • Financial goals. Why are you opening a bank account? If it’s to spend money, go with a checking account. If it’s to save and build wealth, go with a savings account or CD. If you want a little bit of both, a money market account may fit the bill.
  • Fees. Bank account fees include overdraft, ATM, daily balance, paper statement, and monthly maintenance fees. Look for an account with $0 monthly fees and read through the fine print to know how to avoid other associated fees.
  • Minimum balance requirements. Some accounts come with minimum opening deposit requirements. Depending on how much money you want to keep in your account will help you determine which bank account you’ll want to open.
  • Interest. Although savings accounts are a popular choice to grow your money, there are checking accounts that earn interest. Compare interest rates and how it’s compounded to decide which account is right for you.
  • Banking needs. Everyone has unique banking needs. Some prefer convenience and flexibility, while others want to earn rewards and interest. The best bank account will help you manage your finances efficiently and reach your goals.

Best bank accounts by type

The best bank accounts are transparent and flexible and offer perks that help you reach your financial goals. When considering the best accounts, we looked at factors like interest rates, ease of use, ATM access, deposit requirements, monthly fees and additional perks.

Best overall digital banking alternative

Aspiration Spend & Save Account

Finder Rating: 4.2 / 5 ★★★★★

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Aspiration Spend & Save Account is an eco-friendly cash management account with an eye on sustainability and a competitive APY to boot. If you become an Aspiration Plus member, you can earn up to 3% APY and up to 10% cash back on debit card purchases at specific merchants like Warby Parker and Blue Apron. Plus, your cash is FDIC-insured for up to $2 million. But you'll need to meet the requirements to earn the max APY. Aspiration Plus members that pay $7.99 a month (or $5.99 a month if you pay annually) earn 3% APY on balances up to $10,000 when they spend $1,000 a month with their Aspiration debit card. Customers on its basic account with no mandatory monthly fee can earn up to 3% APY. And for those who don't meet the monthly spending requirement or have an account balance greater than $10,000, you can still earn some interest if you're an Aspiration Plus member.

For more accounts that combine checking, savings and investment services under one product, compare our list of best cash management accounts.

Best overall bank account for money market saving

CIT Bank Money Market

Finder Rating: 3.9 / 5 ★★★★★

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on CIT Bank's secure site
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The CIT Bank Money Market account has a low opening deposit, no monthly fees and a competitive 1.55% APY that's seven times higher than the national average.

For more accounts that give you flexible access to your savings, compare our list of best money market accounts.

Best overall bank account for savings

Synchrony High Yield Savings

Finder Rating: 4.9 / 5 ★★★★★

Read Review
This Synchrony account wins for best overall bank account for savings because it grows your money fast with a strong APY and gives you plenty of ways to access it when the time comes.

For more accounts that fit your goals, compare our list of best savings accounts.

Best overall bank account for checking

Capital One 360 Checking

Finder Rating: 4.2 / 5 ★★★★★

Read Review
We've dubbed this free Capital One 360 Checking account best overall for its reliable interest rate, flexible overdraft options and convenient ATM access. Plus, Capital One doesn't charge foreign transaction fees, and it offers early paydays.

For more accounts that fit your spending lifestyle, compare our list of best checking accounts.

Best overall bank account for CDs

Marcus by Goldman Sachs High-yield CD

Finder Rating: 4.5 / 5 ★★★★★

Read Review
Marcus by Goldman Sachs High-yield CD takes home the gold for best overall bank account for CDs thanks to its hassle-free online application process, low minimum opening deposit and strong APYs across all CD terms.

For more accounts that fit your savings goals, compare our list of best CDs.

What’s the best type of bank account for me?

The best account for you will depend on what you plan on using it for, so it’s important to identify what you value in your banking experience.

This table highlights the type of bank account that may be right for you depending on your situation:

If you’re a…

Consider this account

Features

Learn more

Digital nomad or travelerDigital bank accountTypically two-in-one spend and save accounts that are chockfull of budgeting tools and auto-save features to help you reach your goals
Compare accounts
CoupleJoint bank accountAn effective way for couples to manage their money together
Compare accounts
Business ownerBusiness bank accountMakes it easy to manage cash flow and keep track of spending for tax and accounting purposes
Compare accounts
ChildKids bank accountCan help children learn how to manage their money, comes with parental controls and usually doesn’t have monthly fees
Compare accounts
Teen or studentTeen bank accountCan help your child manage earned money and can teach them good habits they can carry into adulthood
Compare accounts

Compare popular bank accounts by type

Use the tabs on this table to sort through popular checking, savings, and money market accounts, as well as CDs. Sort each table by minimum deposit and APY to find one that’s right for you.

Name Product Fee Minimum deposit to open Annual Percentage Yield (APY) Offer
Chime Checking account
Finder Rating: 4.7 / 5: ★★★★★
Chime Checking account
$0 per month
$0
N/A
Save easily and access your paycheck up to 2 days early with direct deposit. Pay $0 monthly fees, and no minimum balance is required. Access 24/7 support and get daily balance and transaction alerts. FDIC insured.
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US Bank Smartly Checking
Finder Rating: 3.2 / 5: ★★★★★
Bonus
US Bank Smartly Checking
$6.95 per month
$25
N/A
New offer: Earn up to $600 when you open a new U.S. Bank Smartly™ checking account and complete qualifying activities. Subject to certain terms and limitations. Offer valid through April 11, 2023. Member FDIC
Take control of your spending with integrated tools such as automated budgeting, upcoming due date alerts, low balance alerts and more, available in the US Bank Smartly Checking mobile app. Easily send and receive funds via Zelle. Waive overdraft fees by depositing money before the forgiveness deadline. Member FDIC.
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View details
BMO Harris Smart Advantage™ Account
Finder Rating: 4.7 / 5: ★★★★★
Bonus
BMO Harris Smart Advantage™ Account
$0 per month
$25
N/A
Get a $200 bonus when you open a new Smart Advantage account and have a cumulative total of $4,000 or more in qualifying direct deposits in the first 90 days
Earn a $200 cash bonus after $4,000 deposits in the first 90 days. Pay $0 monthly fees and no minimum balance. Access a large nationwide network of free ATMs. Member FDIC.
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View details
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Name Product Annual Percentage Yield (APY) Minimum balance to earn interest Minimum deposit to open Offer Estimated total balance
American Express® High Yield Savings Account
Finder Rating: 4.6 / 5: ★★★★★
American Express® High Yield Savings Account

3.75%

$1
$0
$1,037.50
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
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View details
CIT Bank Platinum Savings
Finder Rating: 3.8 / 5: ★★★★★
CIT Bank Platinum Savings

4.40%

0.25%

$0
$100
$1,044
Earn 4.4% APY on balances of $5,000 or more. Open an account in five minutes or less. Easily manage your account with CIT’s mobile banking app. FDIC insured.
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View details
Patriot Bank High-Yield Money Market Deposit Account
Finder Rating: 4.9 / 5: ★★★★★
Patriot Bank High-Yield Money Market Deposit Account

4.75%

$0
$1
$1,047.50
Money market deposit accounts earn interest like savings accounts but also come with checks and debit cards. Earn 4.75% APY with Patriot Bank’s MMDA. Open an account online in under five minutes. $1 minimum deposit. FDIC insured.
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View details
Western Alliance Bank High Yield Savings Account through SaveBetter
Finder Rating: 4.9 / 5: ★★★★★
Western Alliance Bank High Yield Savings Account through SaveBetter

4.75%

$0
$1
$1,047.50
Get an impressive 4.75% APY, which is 13.5x higher than the national average. All with $0 fees and only a $1 minimum deposit required. FDIC insured.
Go to site
View details
U.S. Bank Elite Money Market
Finder Rating: 3.9 / 5: ★★★★★
Exclusive
U.S. Bank Elite Money Market

3.50%

0.75%

0.01%

$0
$100
$1,035
With a tiered interest rate, U.S. Bank Elite Money Market pays you more interest for higher balances. Earn 0.01% APY for balances under $25,000. Earn 3.50% APY for balances up to $499,999.99. Monthly fee is waived for a $10,000+ balance. Member FDIC.
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View details
Lemmata Savings Bank Money Market Account
Finder Rating: 4.6 / 5: ★★★★★
Lemmata Savings Bank Money Market Account

4.55%

$0
$1
$1,045.50
Get a competitive 4.55% APY with a $0 monthly fee. Open with as little as $1. FDIC insured.
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View details
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$
Name Product Annual Percentage Yield (APY) Minimum balance to earn interest Minimum deposit to open Offer Estimated total balance
Patriot Bank High-Yield Money Market Deposit Account
Finder Rating: 4.9 / 5: ★★★★★
Patriot Bank High-Yield Money Market Deposit Account

4.75%

$0
$1
$1,047.50
Money market deposit accounts earn interest like savings accounts but also come with checks and debit cards. Earn 4.75% APY with Patriot Bank’s MMDA. Open an account online in under five minutes. $1 minimum deposit. FDIC insured.
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View details
Hanover Bank Money Market Deposit Account through SaveBetter
Finder Rating: 4.9 / 5: ★★★★★
Hanover Bank Money Market Deposit Account through SaveBetter

4.65%

$0
$1
$1,046.50
Money market accounts are similar to savings accounts but typically come with check writing capabilities and a debit card. Easily open an online account and access your account online 24/7. FDIC insured.
Go to site
View details
U.S. Bank Elite Money Market
Finder Rating: 3.9 / 5: ★★★★★
Exclusive
U.S. Bank Elite Money Market

3.50%

0.75%

0.01%

$0
$100
$1,035
With a tiered interest rate, U.S. Bank Elite Money Market pays you more interest for higher balances. Earn 0.01% APY for balances under $25,000. Earn 3.50% APY for balances up to $499,999.99. Monthly fee is waived for a $10,000+ balance. Member FDIC.
Go to site
View details
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Name Product 6-month APY 1-year APY 5-year APY Minimum deposit to open
Western Alliance Bank 12 months CDs through SaveBetter
Finder Rating: 4.7 / 5: ★★★★★
Western Alliance Bank 12 months CDs through SaveBetter
N/A
5.01%
N/A
$1
Get 5.01% APY on a 12 month CD, and earn an APY that’s 14.8x higher than the national average. Pay no fees and just a $1 minimum deposit. FDIC insured.
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Barclays Online CDs
Finder Rating: 4.5 / 5: ★★★★★
Barclays Online CDs
0.10%
5.00%
4.30%
$0
Get competitive rates on CD term lengths from 3 to 60 months. A reliable and secure way to see your money grow. FDIC insured.
Go to site
More Info
CIT Bank Term CDs
Finder Rating: 3.5 / 5: ★★★★★
CIT Bank Term CDs
4.15%
0.30%
0.50%
$1,000
Choose from a range of terms with no maintenance fees and $1,000 minimum to open. FDIC insured.
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More Info
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Compare bank accounts by state

Looking for a bank in California, New York and Texas? Use one of these lists to explore your options:

What’s a bank account?

A bank account helps you save for the future, pay bills, spend conveniently, transfer money where you need it and get cash when you want it. Financial institutions offer bank accounts to give you a secure location to hold your money.

The benefits of owning a bank account

Having a bank account can help you manage your everyday finances and keep track of your money. The benefits of owning one are:

  • A convenient way to organize your money. For example, paying bills, receiving your income, paying for goods and services or sending money to someone else.
  • A safe place to keep your money. This is especially helpful during uncertain economic climates ⁠— the FDIC offers a guarantee on deposits of up to $250,000 per person, per institution.
  • A place that records your transactions. When applying for a loan, lenders can refer to your transaction records to assess how well you can save money. You can also see where you’re spending most of your income.
  • A place to build your assets. Money held in your transaction account is easy to access ⁠— by linking it to a savings account, you can also earn interest.

What to watch out for

Here are two mistakes to be mindful of when selecting a bank account:

  • Choosing the wrong type of account. Each type of account serves a very specific purpose. Not choosing the right one could result in paying unnecessary fees or penalty charges.
  • Not having the right features. Look closely at each account to ensure that it has the features you need to make your banking needs easier.

What’s the difference between bank account types?

Just some of the brands we compare

Select any company logo below to compare more bank accounts from that brand.

  • Chase logo
  • cit-bank-Logo
  • Capital-One-Logo
  • Aspiration-Logo
  • American Express logo

How many bank accounts should I have?

The number of bank accounts you open depends on your personal financial goals. Most people have one checking account and one savings account, but there’s no limit on the number of accounts you can have. Opening multiple accounts is beneficial for budgeting purposes or to help you reach specific savings goals, but it can complicate your finances as well.

As your savings account balance grows, it may make sense to explore other savings options, such as certificates of deposit (CDs). CDs generally offer higher interest rates than standard savings accounts, allowing your money to grow more quickly. And if you’re looking for a hybrid between a checking and savings account, you can consider a money market account or an interest-bearing checking account.

Resources to open and close a bank account

The specific steps involved when opening or closing a bank account may vary slightly from one institution to the next, but they generally follow the same route.

Opening a joint account

Joint accounts are best for people who are working towards a similar financial goal together.

Why most of us are unwilling to change banks

We don’t want to change banks for a number of reasons. If it’s not our priority to make a change, it may be because we’re getting exactly what we need from our bank or because it’s too much of a hassle to switch. If you’re satisfied with the services your bank provides — or simply feel loyal to the company you’ve been with for years — you might feel less inclined to change.

How do banks protect my security online?

Here are some common measures banks take to protect your sensitive information:

  • Investment in safety. Banks spend millions of dollars to protect your money, mainly because they are required to refund money to those who have been defrauded.
  • Secure Socket Layer (SSL) encryption. This gives an added layer of protection from hackers.
  • Password security. You’ll often find that your password needs to be a certain length and contain certain characters.
  • Encrypted personal information. This means that the lock symbol is displayed in your browser, and the information coming in and out is scrambled.
  • Log-in security. You’re locked out of your account after too many failed log-in attempts. Plus, you’re auto-logged out after a few minutes of inactivity, and there are firewalls in place so only authorized people can log in.
  • SMS codes. To ensure you say who you are, banks will also send codes to your phone to authorize new transactions.

What should I do if someone is trying to take money from my bank account?

If you’re suspicious that someone hacked your bank account or stole your identity, speak to your bank right away. Ask exactly what information would have had to be provided to your bank for them to be able to access your account. If you’re worried about identity fraud, speak to your local police station — they may request that you change your driver’s license.

Which is the safest type of bank account?

Savings accounts, checking accounts, money market accounts and CDs are all safe as long as they are insured by the FDIC or NCUA. Most will cover up to $250,000.

Quick tips for using everyday bank accounts

  • Take advantage of cashback opportunities. If you’re paying for purchases using your debit card, ask for cash out at the same time rather than withdrawing at an ATM. This counts as one transaction, not two, and lets you avoid any potential ATM fees.
  • Monitor your transaction history. If your account has a limit on the number of transactions, you can make each month before fees apply, monitor your account regularly and try to work out ways to minimize your transactions where possible
  • Bank securely with credit. When you make a purchase, should you choose debit or credit? By choosing credit, you’ll be activating enhanced security or the complimentary insurance policies offered on your card.
  • Find ways to waive fees. If you’re currently paying a monthly account-keeping fee on your account, ask your bank what options you have for getting that fee waived. They may suggest opening a savings account, signing up for direct deposit or maintaining a minimum balance to get rid of that fee. They may also suggest a different transaction account that could end up suiting your needs better in the long run.

Should I open an international bank account if I’m starting a job overseas?

Going with an international bank could help, but be mindful that in each jurisdiction, the banks are under their local regulations and are separate legal entities. Depending on how strict they are in the country that you’re working in, it may not be worth switching to another bank. Some banks, such as HSBC or Citi may be able to offer you worldwide assistance.

Using your bank account for international transactions

Is it possible to reverse a foreign exchange transaction on my transaction account? You will need the help of your bank in most circumstances, but if you have the supporting documentation, then you should be able to reverse a foreign exchange transaction.

Is it possible to cash out an international check? Yes, some US financial institutions will accept an international check deposit, although the funds could take longer to clear, and you may be charged international transaction fees.

Do foreign banks charge a fee to receive an international money transfer? Yes, there are foreign banks that will charge your recipient upon receiving funds from an international money transfer. Remember to take into account exchange rates and recipient fees.

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Frequently asked questions

How much tax do I need to pay from the interest I’ve earned from my bank account?

The amount of tax payable depends on your income. The marginal tax rate is then calculated from there. See our tax returns guide for more information.

How do I find out what my bank account number is?

Locate this information on your most recent bank statement or by logging into your online banking account. Or call your bank directly.

Which bank accounts let me deposit money into my account with an ATM?
Most traditional bank accounts will allow you to use ATMs to deposit checks and cash. But some digital bank accounts may not allow for cash deposits, but you may have the option of depositing checks through a mobile app.

How do I transfer money to another bank account?
Visit your nearest bank branch or use your financial institution’s phone banking service to make a transfer. But the simplest way to transfer money is through your online banking account. The exact transfer process varies depending on your bank, but you’ll typically have to select the account you want to transfer funds from, provide details about your recipient (their name and account number) and specify the amount that you would like to transfer.

Also, you can transfer money between accounts through your cell phone.

Read more on this topic

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4 Responses

    Default Gravatar
    AmandaNovember 30, 2018

    How do I get cash without my direct express card because I’m waiting on my replacement card in the mail.

    Reply
      Default Gravatar
      nikkiangcoDecember 6, 2018

      Hi Amanda,

      Thanks for getting in touch! To withdraw cash from your Direct Express card while you wait on your replacement card, you may visit any bank or credit union that displays the MasterCard® acceptance mark and get cash from a teller. Hope this helps and let me know if you have questions, I’m here to help!

      Best,
      Nikki

      Reply
    Default Gravatar
    JeffJuly 7, 2017

    I would like to set up an account for my civic organization that requires two authorizations (digital preferred) for any withdrawal of $5000 or more. Can you please help me find a bank that will provide this service?

    Reply
      Avatarfinder Customer Care
      MayJuly 10, 2017Staff

      Hi Jeff,

      Thanks for reaching out.

      So far, we do not have an available comparison page for different bank accounts, but most major banks would allow you to open a bank account for your civic organization with two authorized signatories. I would suggest that you contact any of the banks near your office to confirm your application.

      Meantime, you may like to read our guide on choosing a bank account that will work according to your needs.

      Cheers,
      May

      Reply
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