What Is Savings Account?
Example: "I keep my emergency fund in a savings account where it earns 4% interest."
Why It Matters
A savings account is where you build financial security. Unlike checking accounts, savings accounts earn interest on your balance, meaning your money grows just by sitting there. High-yield savings accounts at online banks can earn 10 to 20 times more interest than traditional accounts. Federal regulations previously limited savings withdrawals to six per month, and while that rule has been relaxed, savings accounts are still designed for long-term storage, not daily transactions. Using separate savings accounts for different goals like emergency fund, vacation, and car fund makes it easier to track progress.
Try it: Practice managing savings in CustomBank. Open tool →
Try it: Use the free Savings Goal Calculator to see how a savings account with compound interest can help you reach your goal faster.
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Practice Banking Terms Hands-On
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