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7 financial accounts you need for a richer life

Get the most out of your money with these smart money moves.

The right financial accounts play a crucial role in improving your financial health. They serve various purposes, from keeping your money safe to helping it grow for future needs like healthcare, education and retirement. I’ll review seven accounts that most individuals and families need to stay organized, pay unexpected expenses, achieve goals and grow richer.

Here’s what you should know about seven accounts and tips for opening them.

1. Checking account

While having a checking account might seem basic, FDIC data shows that about 4.5% of US households, or approximately 5.9 million adults, were “unbanked” in 2021, meaning without a bank or credit union account. Carrying and storing large amounts of cash is a bad idea. Homeowners and renters insurance doesn’t cover cash, so you can’t get it back if it’s stolen, lost or destroyed.

Instead, everyone should use an FDIC-insured bank or NCUA-insured credit union checking account to keep money safe. Plus, it’s like the Grand Central Station for your cash flow, with income and expenses going in and out.

The best checking accounts offer loads of free services — like online bill pay, remote check deposit, unlimited transfers, ATM fee reimbursement and a user-friendly mobile app — that make your daily financial transactions easy. In addition, they don’t charge any monthly or annual fees.

2. Savings account

Unlike a checking account that allows unlimited transactions, that’s not the case with a savings account. You can make as many deposits as you like, but you’re typically limited to six monthly withdrawals.

A savings account is the perfect place to put money for short-term spending and goals like holiday expenses, vacations and emergencies. Some even allow sub-accounts for different purposes.

The best high-interest savings accounts pay 5% APY or more, making them excellent for building and maintaining a healthy emergency fund. While it can be tempting to invest your cash reserve for higher returns, it’s best to keep it entirely safe from risk so you can tap the total amount when needed.

3. Kids’ banking account

Kids’ banking accounts have three categories: kids’ banking apps (usually with a prepaid card), kids’ checking accounts (typically with a debit card) and kids’ savings accounts.

  • Kids’ banking apps offer features that allow families to create chores and automate allowances, set spending limits, restrict kids from shopping at specific merchants, set up a savings account that earns parent-paid interest and teach kids to spend, save, give and invest wisely.
  • Kids’ checking accounts are joint bank accounts co-owned between a child and their parent or legal guardian. That’s because most banks only allow you to open checking accounts for kids 13 or older. They come with a debit card so kids can make purchases in-store and online — and most are free to set up and get started. However, kids’ checking accounts don’t have as many parental controls or financial literacy tools as kids’ banking apps.
  • Kids’ savings accounts are available for a child, regardless of age, if they have a valid Social Security number. It’s a joint account co-owned between a parent and child, and it typically converts into a regular savings account when they turn 18.

4. Retirement accounts

In addition to having the right banking products, everyone should regularly use one or more tax-advantaged retirement accounts to invest for the future. You might need retirement income for decades after you stop working, so building your own investments is vital.

Employers offer the most popular retirement accounts, such as a 401(k), 403(b) or 457 plan. Many companies pay additional matching contributions, giving your account a nice boost.

However, if you don’t have a retirement plan at work or are self-employed, just about everyone qualifies for an individual retirement account or IRA. The self-employed can also use SEP-IRA or solo 401(k) accounts. You might even be eligible to use more than one of these terrific accounts.

Retirement accounts give you significant tax advantages, either with an upfront tax deduction (even if you don’t itemize deductions) on contributions to traditional accounts or tax-free withdrawals in retirement with Roth accounts.

Just be sure you will only need the money after the official retirement age of 59.5. Taking early withdrawals generally comes with a 10% penalty plus income tax on amounts that weren’t previously taxed.

5. Brokerage account

Unlike retirement accounts that typically penalize you for early withdrawals and impose an annual contribution limit, you can withdraw funds penalty-free and contribute an unlimited amount each year to a brokerage account. However, the downside is owing tax each year on account gains.

Consider maximizing at least one retirement account annually, and if you still have more to invest, use a taxable brokerage account. There are many to choose from, but Finder reviews the best brokerage accounts in 2024, making it easier to choose the right one.

6. Health savings account (HSA)

If you purchase an HSA-qualified health plan (on your own or through an employer), you can enroll in a tax-advantaged HSA to pay eligible medical expenses. Note that these health plans work best when you’re in relatively good health and aren’t likely to spend the full deductible annually.

The beauty of an HSA is that your contributions are tax-deductible (even if you don’t itemize tax deductions), account growth is tax-deferred and distributions are tax-free if you spend them on qualified, unreimbursed medical expenses.

Just like with a retirement account, you should never put money in an HSA that you might need for everyday expenses. Withdrawals spent on non-qualified expenses are subject to income tax plus a hefty 20% penalty.

If you qualify for an HSA, they’re available at many banks, credit unions, brokerages and specialty institutions. Most are convenient and offer paper checks, a debit card and online banking.

7. Credit card

When used responsibly, the best credit cards offer many advantages, including convenience, purchase protection, an easy way to build credit, cashback and rewards, travel benefits and a credit line for emergencies. However, carrying a high balance and making late payments can lead to expensive interest charges and negative marks on your credit reports.

There’s no limit to the number of credit cards you can or should have. But having at least two is wise, so you have a backup if something goes wrong with one. And to have as many as you feel comfortable managing and will benefit your financial life.

About the Author

Laura Adams is a money expert and spokesperson for Finder. She’s one of the nation’s leading personal finance and business authorities. As an award-winning author and host of the top-rated Money Girl podcast since 2008, millions of readers, listeners, and loyal fans benefit from her practical advice. Laura is a trusted source for media and has been featured on most major news outlets, including ABC, Bloomberg, CBS, Consumer Reports, Forbes, Fortune, FOX, Money, MSN, NBC, NPR, NY Times, USA Today, US News, Wall Street Journal, Washington Post, and more. She received an MBA from the University of Florida and lives in Vero Beach, Florida. Her mission is to empower consumers to live healthy and rich lives by making the most of what they have, planning for the future, and making smart money decisions every day.

This article originally appeared on and was syndicated by

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