What is a Savings Account?

Savings accounts are very common.  They are a great place to save up for a vacation, rainy day, or just to stash that extra cash you used to keep in your sock drawer.

A savings account is a great place to store your money and earn a little interest, although they are a bit less accessible than a Checking Account (What is a Checking Account?)

As opposed to a checking account, when you store your money at a bank using a Savings Account, your money is not directly accessible (though it can be with a simple visit to the bank). By storing your money with the bank, you can be sure that your money is safe and secure.

The money is even further secured against bank failure by the FDIC (What is the FDIC?) as well.

Will I Earn Interest with a Savings Account?

You absolutely should. If you’re opening a Savings Account that pays zero interest, you should look into another bank. However, if you’re looking for any sizable interest a savings account is likely not the answer for you. The interest that you will receive will be very, very small. Often under 1% annually. But, minuscule interest is better than none at all.

Savings Account as Overdraft Protection

Many banks offer a great service called overdraft protection. Learn what Overdraft Protection is.