Getting Started: Savings Accounts
A savings account is a financial account held at a bank or other financial institution that allows you to deposit money, earn interest, and withdraw funds when needed.
These accounts typically have higher interest rates than checking accounts, and are used to hold onto money and let it grow while you save.
Saving & Interest
These accounts provide a safe and secure way to store your money while also allowing it to grow over time with interest.
- Interest is the money paid by the bank to you;
- It’s calculated as a percentage of your account balance, with the rate determined by the type of account you have and the credit union or bank you’re using;
- The financial institution pays you this interest as an incentive for keeping your money with them, and it is typically paid monthly or annually.
Uses for Savings Accounts
Savings accounts provide a safe place to store money, because like other accounts at a credit union or bank, funds in a savings account are protected and insured (typically up to $250,000).
This can be especially useful for achieving financial goals, such as saving for:
- A car
- A down payment on a home
- An emergency fund
Whatever your reason for wanting to build up your savings, a savings account is a secure and simple way to store your cash.
