Savings Account

Did you know that there are savings accounts that offer 2% or more in interest on your cash?

Oh, and it’s safe!

What is a savings account?

A savings account is a place where you store your cash securely and earn interest on your money. These accounts are backed by the Federal Deposit Insurance Corporation (FDIC) meaning that your cash is insured up to $250,000 in any occurrence where the bank might fail. Investments accounts, stocks or bonds, on the other hand, are not insured.

Savings account are a plus:

By having a savings account it separates the everyday spending that comes out of your checking account to a safe place where you consciously save money for emergency purposes, college funds or even a vacation while earning interest.

Start with $500 in your savings account. It is smart to keep a couple of months worth of expenses in your savings account as an expense back-up. It is important to pay yourself before anything else, this account will grow itself if you stick to that rule. Build your savings account month by month!

Low initial deposits and no fees are always great when you open a savings account. There are a number of online banks that offer $0 monthly fees and no minimum balance. But remember, there is a federal law that limits the number of withdrawals and transfers from a savings account to only six a month.

How to open an account:

  1. Compare savings accounts to find the right one for you.

  2. Open the account with a minimum amount or none at all.

  3. The bank pays you interest.

  4. Sit back and watch your money grow.

How do savings accounts work?

When the decision is made to open up an account, it is all uphill from there. Money that is put into a savings account helps with money growth from interest along with saving overall. On top of that, you earn compounded interest over time that can grow into a good chunk of cash. Compounded interest is essentially “interest on interest” that is just boosting up the numbers in the account.   

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” - Albert Einstein

man looking through savings & money market accounts

Money Market Account

Money market accounts are slightly different than savings accounts, they may offer higher interest pay rates along with some checking account like features.

What is a money market account?

MMA’s are essentially a savings account that may offer high-interest rates plus check writing options or a debit card for your convenience. But, they require a higher minimum balance compared to a saving account. The FDIC also insured up to $250,000 which provides peace of mind.

Money market accounts are a plus:

High interest rates are offered to money market accounts from a bank or credit union rather than savings accounts.

Do you need to write up monthly checks? You’re looking at the right account then, with an MMA you have the ability to write up to six checks a month.

Planning to save a couple thousand? Money market accounts are insured and they are a safe place to keep your hard earned money at an attractive interest rate.  

How do Money Market Accounts Work?

Since MMA’s are a very liquid investment that facilitates the withdrawal of funds in case of a dreadful rainy day. It is not a checking account although they have check-writing and debit card features mentioned above that may be useful. MMA’s earn interest on your cash at a higher interest rate than a savings account but with a higher requirement minimum.

Top Trending Savings & Money Market Accounts

Top Trending Savings & Money Market Accounts

With the savings and budget calculator, you can understand where your money is going and how much you should be saving a month to compare the better option.

Click to view the best ways to save money.