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12 types of savings accounts
Compare different savings accounts to find one that matches your goals.
Some types of savings accounts provide total access to your money while others are designed to help you keep your hands off. Explore our guide on the 12 different types of savings accounts to find which one will help you reach your savings goals.
Types of savings accounts
There are 12 types of savings accounts you can consider for depositing your money:
- Deposit savings accounts. A basic savings account is offered by traditional banks and credit unions. They usually have a low opening deposit and a modest interest rate. But you can bank in-person.
- High-yield savings accounts. This type of account is mostly found at online banks and digital institutions. They have the highest interest rates of any savings account, but you can’t bank in-person.
- Free savings accounts. These accounts don’t have monthly fees, so you can keep more money in your pocket each month.
- Joint savings accounts. This type of account is co-owned by two or more people — usually two significant others or a parent and a child.
- Student savings accounts. Designed for college students between the ages of 18 and 24, these accounts can be found at traditional banks and credit unions or online institutions.
- Kids’ savings accounts. Help your children develop good savings habits with a kids’ savings account. Most come with educational resources to help teach your little one good money management skills.
- Automatic savings accounts. Most financial institutions offer automatic savings accounts that allow you to link to your checking account, so you can automatically move money from checking to savings on a recurring basis.
- Christmas savings accounts. These accounts give you a jump start on saving for the holidays. You typically fund the account throughout the year and gain access to your money in November.
- Business savings accounts. Build up your company’s cash reserves with a business savings account from a brick and mortar or online institution.
- Money market accounts. These accounts combine the best parts of a savings and a checking account into one. You’ll earn interest on your money and get a debit card and checkwriting privileges. But money market accounts typically have high opening deposit requirements.
- Certificate of deposits (CDs). With a CD, you’ll leave your money in for a certain amount of time — usually three months to five years or more. They typically have no monthly fees, minimum deposits of $1,000 or more and you’ll pay early withdrawal penalties if you need to access funds before maturity.
- Cash management accounts. These are cash accounts offered by brokerage firms. They’re typically a hybrid checking and savings account that integrate seamlessly with your investment account. Although brokerage firms aren’t FDIC insured, they typically partner with other banks to insure cash management account deposits.
- Retirement accounts. From 401(k)s to IRA accounts, retirement accounts allow you to make after-tax contributions as part of your retirement plan.
What are the most popular types of savings accounts
The three most popular types of savings accounts are high-yield savings accounts, money market accounts and CDs. You’ll find these three types at most major banks and credit unions.
What is the best type of savings account?
The best type of savings account is the one that helps you reach your savings goals. It looks different for everyone. If your goal is to save for an emergency or vacation fund, then a savings or money market account will help you build a safety net while giving you access to funds when you need them. But if you’re saving for a car you won’t buy for another year, a CD will allow you to lock in a high-interest rate while you wait to use the funds.
Ask yourself why you’re saving and when you’ll need the money. Then, find an account that supports those goals.
Which type of savings account is best for me?
The right type of savings account for you depends on your savings goals and how much you have to save. While traditional savings accounts are a great way to start, CDs can earn higher interest rates if you don’t need access to your money, and money market accounts can come with higher interest rates if you meet the minimum balance and/or monthly deposit requirements. If you’re saving for retirement, specialized retirement accounts often come with tax advantages. These prompts could help you decide:
Young or a student?
Every dollar counts at this stage. Whether you’re studying, interning or simply waiting to turn 18, you’ll find a range of accounts designed just for you.
Account type
- Student savings
- Basic savings
Features
- Earn interest
- Pay low or no fees
- 24/7 access to your money
Saving for a goal?
Developing a strategy to get to your set goal might be easier than you think. Options like automatic transfers can help. But take note of the interest rate, and understand the features that come with your account.
Account type
- High-yield savings
- Online savings
- CDs
Features
- Free transfers
- Automatic savings plan
Retired or a senior?
Whether you love the convenience of the Internet and prefer to chat up a branch rep face-to-face, banks and credit unions offer a range of options for the older set.
Account type
- High-yield savings
- Online savings
- High-yield CDs
- Traditional CDs
- IRA CDs
Features
- Competitive interest rates
- Pay low or no fees
Teaching children?
Learning to save is an important skill for the future, and most parents want to teach their kids to manage money responsibly. Help your child’s savings grow by choosing a starter account.
Account type
- Basic savings
- Kids’ savings
Features
- Joint accounts with parents
- Limited withdrawals
- Low or no fees
Moving to the US?
If you’re moving to the US for work or study, your covered with a wide range of banking options. Look for a standard bank account, like a checking account, for everyday banking needs, and a savings account to grow surplus cash.
Account type
- Basic savings
- High-yield savings
- Money market
Features
- Multilingual bank staff
- 24/7 access to your money
Looking for an online account with no fees?
A bank account that’s fee-free puts every dollar you deposit closer to your savings goal. Plus, online accounts typically offer strong interest rates.
Account type
- Online savings
- High-yield savings
- Money market
Features
- Low or no fees
- Higher interest rates
How to compare different types of savings accounts
Savings accounts, money market accounts, CDs, cash management accounts and retirement accounts each have specific structures and features to help you save. To find the right one for you, consider the monthly fees, interest rates and requirements to withdraw your cash. Use the table to compare account:
| Traditional savings account | High-yield savings account | Money market account | Certificate of deposit (CD) | Cash management account | |
|---|---|---|---|---|---|
| Best for | Those who want a basic account that earns a modest interest rate, but may come with in-person banking | Those who want to earn an interest rate higher than the national average, but may not have in-person banking | Those who want a checking and savings hybrid that earns interest but is accessible | Those looking for a short-term investment with a locked in interest rate | Those who invest regularly and want to keep their bank account at their brokerage firm |
| Average interest | ~0.60% APY | ~1.30% APY | ~0.09% APY | ~0.06–0.51% APY | ~0.15–1.20% APY |
| Monthly fees | Sometimes | Sometimes | Sometimes | ||
| Minimum deposit | $0 to $100 | $0 to $100 | $2,500 to $10,000 | $500 to $10,000 | $0 to $50 |
| ATM access | Sometimes | ||||
| Checkwriting | |||||
| FDIC or NCUA insured | |||||
| Withdrawal limits | six a month | six a month | six a month | Can’t withdraw until maturity | six a month |
Compare savings accounts
Use the table to compare and sort popular savings account options by APY, fees and minimum deposit to open. If more than one account catches your eye, click the “Compare” box next to each one for a side-by-side view.
Bottom line
There are several types of savings accounts — each with their own features, pros and cons. Each one is unique and serves a different purpose in helping you reach your savings goals. As always, compare savings accounts to find the best option for you.
Frequently asked questions
Image source: Getty Images
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