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Untouchable savings accounts and CDs
Grow your balance with a locked or fixed-term savings account to reduce the temptation of spending it all.
There are two types of accounts that prevent you from accessing your money: savings accounts and CDs. A savings account doesn’t lock your money, but it places restrictions on how often you can withdraw each month. A CD on the other hand typically locks you out of accessing your funds for a set period and in exchange offers high rates, which are also locked in at the time of opening. This makes CDs a particularly attractive option for shorter term savings that can retain value even if interest rates drop.
Compare CDs that lock your rate
Narrow down top CDs by term length and minimum deposit to find the best one that can lock your savings with a high rate to reach your financial goals. Select Compare for up to four products to see their benefits side by side.
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Certificates of deposit
A certificate of deposit (CD) locks your money away from one month to five years, while it earns a fixed interest rate. It’s more restricting than a traditional savings account because you can’t access your money until the term is finished. If you need to make a withdrawal, you’ll need to give 31 days’ notice and pay a penalty. On the upside, the best CDs on the market have terrific interest rates.
There are a couple of additional key benefits to CDs. First, you get the security of a fixed interest rate and a guaranteed return on your investment. If interest rates drop while your money is locked away, your savings won’t be affected.
Second, these accounts are set up to discourage you from dipping into your savings balance. You typically can’t access the funds immediately, so any money you deposit is safe from the risk of impulse buying and unnecessary spending.
On the other side of the coin, CDs are not all that convenient if you ever need access to your funds in an emergency, and you also won’t benefit from any interest rate increases until your deposit matures.
What to look for in a CD
Consider the following features when comparing the pros and cons of a CD account:
- The fixed interest rate. Interest rates can vary greatly between banks and the term you choose. Look around for the best interest rates — but make sure there are no unexpected fees attached.
- How often interest is calculated. Check to see whether interest is calculated on the account daily, monthly, quarterly or yearly. The more often interest is calculated, the more your balance grows.
- Term length. When comparing accounts, evaluate the features of accounts with the same term length. For example, only compare six-month CDs with other six-month CDs. If your bank doesn’t offer the term you want, look elsewhere.
- Fees for early withdrawal. It’s worth checking what fee you’ll incur if you need to withdraw your money before the term ends.
- Where the interest is paid. Is the interest you earn paid back into the same or different account? Do you need to open a linked account with the same financial institution to receive interest payments?
- Loyalty bonuses. If you want to reinvest your money into another CD after your first deposit matures, will you be rewarded for your loyalty with a bonus interest rate?
Compare Savings accounts that make it difficult to withdraw from
Narrow down saving account options to find one that best suits your needs. Select up to 4 accounts and click Compare for a side-by-side view of their rates and fees.
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Hard-to-access savings accounts
A savings accounts offers the benefit of compound interest while charging minimal or no fees. It also limits you from withdrawing your money a certain number of times per month. The Federal Reserve imposes a limit of six withdrawals per month on savings accounts through Regulation D. This means that if you withdraw money more than six times a month, your bank can prevent the withdrawal, charge you a fee — or even close your account. But not all savings accounts offer this limitation anymore after the suspension of Regulation D.
Compare savings accounts that limit you from withdrawing your money so that you can focus on growing your savings. To take it a step further, look for one that also doesn’t come with an ATM card.
What to look for in a savings account
Not all savings accounts are created equal. There are a few things to watch out for when signing up for a new account:
- How often interest is compounded. The more often interest is compounded, the more money you’ll earn.
- Minimum balance amount. Banks often have a minimum amount required to open an account. Some banks even have a minimum balance requirement for the life of the account, and you can quickly accrue fees if your balance dips too low.
- Linked account requirements. Some banks will require you to also open a linked checking account with them to open a savings account. If this is the case, make sure the checking account is suited to your needs and doesn’t have any hidden fees.
- Hidden account fees. Exorbitant bank fees can quickly defeat the purpose of any interest earned on an account, so read the fine print to make sure you’re aware of any ongoing fees, withdrawal fees or other transaction charges.
- Accessibility. Check to see whether your account can only be managed online or whether you also have branch, mobile banking and phone banking access.
Individual retirement accounts
If you’re saving up for your retirement, an individual retirement account (IRA) might be your best option. Any money that you put into a traditional IRA account typically cannot be withdrawn without a penalty until you reach retirement age, and contributions are tax deductible at both the federal and state level. TD Ameritrade offers IRAs with both money market accounts and CD options.
Should I get a savings account I can’t touch?
Accounts that restrict or limit you from accessing your savings are best for those who want to grow their money and remove the temptation to spend it all. Before opening such an account, like a CD, make sure you have money set aside in an easy-to-access account, like a savings or money market account, in case you need it for emergencies. And only open a CD if you’re sure you won’t need that money any time soon. If you think you might need it, stick to a savings account instead.
How to put money away and not touch it
Here are a few quick tips to help you put away money and resist the temptation to withdraw it.
Bottom Line
Both certificates of deposit and savings accounts can help you save money. If you think you might need access to your money in the near future, or you want to add money each month, a savings account may be your best option. But if you can commit to keeping your hands off your savings for a specified period, a CD can help you add interest and save up. A lot of savers use both options — when your savings account starts to get comfortably high, you can pull money out and put it into a CD. If you choose one with a high interest rate, you can sit back and watch your savings grow.
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