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Types of bank accounts for your financial needs

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

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Our pick for a savings account: Synchrony High Yield Savings

0.55%

APY

  • Earn customer rewards
  • Free ATM card
  • No minimum balance
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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. However, this policy is temporarily suspended due to the coronavirus pandemic.

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.

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 which type of bank account is 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, 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 bank account for savings

Synchrony High Yield Savings

Synchrony High Yield Savings logo
Finder Rating: 4.9 / 5

★★★★★

Apply now
at Synchrony's secure site
0.55%
APY
None
Fees
None
Min. opening deposit
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.
  • Strong APY. Your savings grows even faster with a 0.55% APY that's compounded daily.
  • Free ATM card. Unlike other savings accounts, this one comes with an ATM card for easy withdrawals. Plus, Synchrony refunds up to $5 in non-network ATM fees each month.
  • No fees. There's no monthly maintenance or ATM fees.
  • Limited transactions. Typically, you can't make more than six outgoing transactions a month without running the risk of having your account closed. But due to the temporary suspension of Regulation D, this policy could be on pause.
  • Daily withdrawal limits. To prevent fraud, you can't withdraw more than $1,000 from ATMs and $500 from point-of-sale retailers a day.
  • One branch. Synchrony's only branch is in Bridgewater, New Jersey, so you'll need to be comfortable managing your account online if you live outside this area.
Interest compounding Daily
Minimum to earn interest $0
Monthly transaction limit 6
Fee per transaction over limit $0

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

Best overall bank account for money market saving

CIT Bank Money Market

CIT Bank Money Market logo
Finder Rating: 3.9 / 5

★★★★★

Apply now
at CIT Bank's secure site
0.45%
APY
None
Fees
$100
Min. opening deposit
The CIT Bank Money Market account has a low opening deposit, no monthly fees and a competitive 0.45% APY that's seven times higher than the national average.
  • Low opening deposit. You only need $100 to open a CIT Bank Money Market account, which is low considering most money markets have opening deposits of $2,500 or more.
  • Minimal fees. CIT Bank doesn't charge anything for monthly maintenance, online transfers or incoming wires.
  • Competitive APY. You'll earn 0.45% interest on your total account balance. You don't have to meet any minimums to qualify.
  • Low transfer limits. People Pay and PayPal transfers are limited to $50 a day, but you can electronically transfer up to $2 million a day.
  • No live chat support. CIT Bank doesn't offer live chat as a support option, which is unusual for an online institution.
Interest compounding Daily
Minimum to earn interest $0
Monthly transaction limit 6
Fee per transaction over limit

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

Best overall bank account for checking

Capital One 360 Checking

0.1%
APY
None
Fees
None
Min. opening deposit
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, so it's a good choice for traveling overseas.
  • 0.1% APY. This account earns more interest than most traditional savings accounts, but there are stronger rates out there.
  • No fees. You won't pay any monthly maintenance, foreign transaction or ATM fees with this account. But ATM owners may charge a fee when you use non-network ATMs.
  • Flexible overdrafts. Capital One gives you four ways to avoid overdraft fees: auto-decline, next-day grace, free savings transfer or an overdraft line of credit.
  • Large ATM network. Use your debit card for free at over 39,000+ Capital One and Allpoint ATMs worldwide.
  • Not 100% free. Although you won't pay routine fees charged by some banks, Capital One will charge you $25 for above-and-beyond services like overnight card replacements and stop payment requests.
  • Expensive outbound wires. It's free to receive domestic and international wire transfers. But you'll pay $40 for each domestic wire transfer you send.
  • Possible credit check. If you choose an overdraft line of credit as your overdraft protection option, Capital One will do a hard-pull on your credit.
APY 0.1%
Account fees $0 monthly
Can the fee be waived? No
Insufficient funds fee $9
ATM transaction fee $0
Paper statement fee $5
Wire transfer fee $40
Foreign transaction fee 0%
Overdraft fee $35

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 CDs

0.55%
1-year APY
0.55%
3-year APY
0.6%
5-year APY
$500
Min. opening deposit
Marcus by Goldman Sachs High-yield CDs 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.
  • Several term options. Lock your money away for as little as six months or as long as six years.
  • 30 days to fund account. Most banks give you 10 days to fund your account. But Marcus lets you make as many deposits as you want for your first 30 days.
  • Strong APYs. Marcus offers consistently high rates for both its short-term and long-term CD options, making it an ideal choice for any CD length.
  • 10-day rate guarantee. If Marcus raises its rates within 10 days of you opening and funding your CD, you'll automatically get bumped up to the higher rate.
  • No branches. Marcus by Goldman Sachs High-yield CDs is online-only, so you can't visit a branch for in-person support. But you can call customer support daily.
  • No partial withdrawals. If you need to dip into your CD before it matures, you'll have to withdraw the full balance.
  • Early withdrawal penalties. Like most banks, you'll pay a penalty fee if you withdraw money before your CD matures. But Marcus has a no-penalty CD option available if you're worried about needing your money before it's time.
6-month term 0.15%
9-month term 0.25%
12-month term 0.55%
18-month term 0.55%
24-month term 0.55%
48-month term 0.55%
60-month term 0.6%
72-month term 0.6%

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

What’s changed in 2021?
We added CIT Bank Money Market as the best overall bank account for money market savings because it has a low opening deposit, no fees and a competitive APY.

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
CoupleJoint bank accountAn effective way for couples to manage their money together
Business ownerBusiness bank accountMakes it easy to manage cash flow and keep track of spending for tax and accounting purposes
ChildKids bank accountCan help children learn how to manage their money, comes with parental controls and usually doesn’t have monthly fees
Teen or studentTeen bank accountCan help your child manage earned money and can teach them good habits they can carry into adulthood

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 APY Minimum deposit to open ATMs Out-of-network ATM fee
Chime Spending account
Finder Rating: 4.7 / 5: ★★★★★
Chime Spending account
N/A
$0
38,000 fee-free ATMs nationwide
$2.50
Get rid of fees with this mobile-first bank offering consumer-friendly accounts. Chime can also help you save easily and access your paycheck faster.
Chase Total Checking
Finder Rating: 2.8 / 5: ★★★★★
Chase Total Checking
N/A
$0
Access to 16,000 ATMs and more than 4,700 branches nationwide
$2.50
Get a $200 bonus when you open a new Chase Total Checking account and set up direct deposit within 60 days of opening your account. Chase's simplest checking account is easy to use and gives you access to 16,000 ATMs and more than 4,700. Available online nationwide except in Alaska, Hawaii and Puerto Rico.
HSBC Premier Checking
Finder Rating: 2.7 / 5: ★★★★★
HSBC Premier Checking
0.01%
$1
Free to use at all ATMs in the US
$0
Get a 3% cash bonus, up to $600 (max. $100 per month) during first six months after account opening. Must open HSBC Premier checking account through offer page by September 30, 2020, and set up qualifying direct deposits into the new account. Conditions apply. Deposit products are offered in the US by HSBC Bank USA, N.A. Member FDIC.
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Compare up to 4 providers

$
$
months
Name Product Interest rates (APY) Fee Minimum deposit to open Interest earned
American Express® High Yield Savings
Finder Rating: 4.6 / 5: ★★★★★
American Express® High Yield Savings
0.50%
$0
$0
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
Aspiration Spend & Save Account
Finder Rating: 3.8 / 5: ★★★★★
Aspiration Spend & Save Account

1.00% on $0 to $10,000 but you’ll need to be enrolled in Aspiration Plus and make at least $1,000 in debit card purchases a month
$0 per month or $15 per month for Aspiration Plus ($12.50 per month if you pay annually)
$10
Deposits are fossil fuel-free and insured by the FDIC. Enjoy a spend and save combo account with unlimited cash back rewards and a $100 bonus when you spend $1,000 in your first 60 days.
Axos Bank High Yield Savings
Finder Rating: 4 / 5: ★★★★★
Axos Bank High Yield Savings
0.61%
$0
$250
No monthly maintenance fees. No minimum balance requirements. Interest compounded daily.
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Compare up to 4 providers

$
$
months
Name Product Interest rates (APY) Fee Minimum deposit to open Interest earned
CIT Bank Money Market
Finder Rating: 3.9 / 5: ★★★★★
CIT Bank Money Market
0.45%
$0
$100
A savings account with a higher-than-average rate and minimal fees.
UFB Direct Premium Money Market Account
Finder Rating: 3.1 / 5: ★★★★★
UFB Direct Premium Money Market Account

0.20% on $25,000+
0.10% on $0 to $24,999.99
$10 per month
(can be waived)
$5,000
Enjoy the security and earning potential of a savings account while maintaining the flexibility to write checks.
Nationwide Money Market Plus
Nationwide Money Market Plus
0.50%
$8 per month
(can be waived)
$1,000
Enjoy low fees and up to $10.00 domestic ATM fees reimbursed per month.
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Compare up to 4 providers

Name Product 1-year APY 18-month APY 2-year APY 3-year APY 5-year APY
CIT Bank Term CDs
0.3%
0.3%
0.4%
0.4%
0.5%
Choose from a range of terms with no maintenance fees and $1,000 minimum to open.
Radius Bank CDs
0.5%
0.5%
0.5%
0.5%
0.5%
Enjoy a low minimum deposit of $500 and earn 0.5% APY on your balance. Apply online for 1 year, 18 month and 3 year terms.
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Compare up to 4 providers

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. 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 look out for 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

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

  • Chase logo
  • bbva-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 even just 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 is trying to take money from your account or possibly attempting to steal 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 you up to $250,000.

Quick tips for using everyday bank accounts

  • Take advantage of cash back 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 Citibank 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 who 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?

You can find this information on your most recent bank statement or by logging into your online banking account. Or you can call your bank directly.

Which banks 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?
You can do this by visiting your nearest bank branch or using your financial institution’s phone banking service, 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.

You can also 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.

      Avatarfinder Customer Care
      nikkiangcoDecember 6, 2018Staff

      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

    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?

      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

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