Decide Which Type of Savings Account Is Best For You
Savings Account With Statement
This account earns interest, and you will usually receive a quarterly statement that lists all your transactions – withdrawals, deposits, fees, and interest earned.
Savings Account With passbook
With this account, you have to go to the bank to make transactions. The cashier will update the account when you go to the bank.
This is an account you join to save money for a special reason, such as a holiday, family vacation, or college. These accounts usually require you to make regular deposits.
Money Market Account
This account usually pays a higher rate of interest and usually requires a higher minimum balance to earn interest than a regular savings account. This account pays a higher rate of interest for higher balances.
Certificate of Deposit (CD)
This is an account in which you leave your money for a set period of time, such as 6 months or 1, 2, or 5 years. The longer you promise to keep the money in the account the higher the interest rate. There is a penalty for withdrawing the money before the term ends.
Special Accounts Some financial institutions offer special accounts that will help you save your money:
Individual Development Account (IDA)
Individual development accounts (IDAs) are matched savings accounts. When an account is matched, it means another organization, such as a foundation, corporation, or government entity agrees to add money to your account to match the money you save in it.
Electronic Transfer Account (ETA)
An ETA is a low-cost savings account that provides federal payment recipients with the opportunity to receive their federal payments through direct deposit.
529 College Savings Plan
A Section 529 plan is a prepaid savings program for higher education. The money grows tax free and when you withdraw it for educational purposes it is generally tax free. The savings can be used for any college in any state.