There are six types of saving accounts in general(1): 

  • Regular or traditional saving account.
  • High-yield saving account.
  • Money market account.
  • Certificate of deposit account.
  • Cash management account.
  • Special saving account.

If you don’t intend to spend, you have a safe place to keep the money which is a saving account.

These types of accounts are more useful for short-term needs such as an emergency fund or long-term needs such as stowing away a down payment for house.

There are many types of saving accounts but the most important thing is to choose the right bank for your personal or financial needs. In account types, choices may be regular or traditional saving account, high-yield saving account, cash management account, deposit certificate, money market account etc.

Traditional or Regular Saving account(2):  Many people save their money for short term need or long term need but they don’t wish to take any type of interest which can be expressed as the Annual Percentage Yield (APY). Many banks allow their customers to use online services via their mobile banking apps on phone or by visiting a branch. In case of failure of bank your deposit can be insured for up to 250,000 per depositor. However, it is only done when such a bank is insured by the  Federal Deposit Insurance Corporation (FDIC).

Pros: 

Some pros of saving account are as follows:

  • It is easy to open a regular account via branch but some people open their account online.
  • You can grow your money by earning interest on savings.
  • If you want to deposit some cash or you need any help you can easily visit the nearest branch.

Cons:

Some cons of saving account are as follows:

  • As compared to other options the interest rates are very low.
  • Interest earnings during monthly maintenance can be cancelled.
  • For huge withdrawals extra fee may be applied.

High – Yield saving account: It is a good saving account when people want to save more money while minimizing the fee they pay. In this type of saving account, they offer a higher APY as compared to a regular saving account. This is another way to attract their savers by giving them better interest rates.

Pros: 

  • As compared to traditional saving account a saver can earn high interest rate.
  • There is some minimum amount required to have new account in online bank.
  • You are likely to be charged a fee on monthly basis at an online bank.

Cons: 

  • There is no access for a saver to deposit the money directly to a bank account in the related branch.
  • The bank takes a few days to transfer money between online and regular banks.
  • By depending on the bank you may not have access to your money via ATM

Cash Management Account: Many people want to have cash for investment in their brokerage and retirement accounts.

Cash management accounts are not like saving accounts anyhow they let you hold the cash that you may invest in any purpose.

Pros: 

  • If you want to invest the money this is the convenient way to earn interest.
  • These banks allow the benefits of both checking and saving accounts.

Cons: 

  • They offer better rates on your saving money.
  • You have no direct access to branch banking since they are attached to online brokerage account.
  • This type of account may not be covered by FDIC insurance.

Saving Account Interest Rate: From a saving account you can earn an interest rate of upto 0.81% annual percentage yield (APY), this rate is offered by Varo bank and is more than 15 times the national average for a saving account of 0.05% APY. There are some best saving account options with their interest rate listed below:-

  • Vero Bank-0.81% APY.
  • Smarty pig by sallie Mae -0.80% APY.
  • Customers Bank -0.80% APY.
  • CGF Bank-0.68% APY.
  • Fitness Bank -0.70% APY.
  • Affirm -0.65% APY.
  • SFGI Direct -0.67% APY.
  • Axos Bank -0.61% APY.
  • Connect One Bank -0.65% APY.
  • TAB Bank -0.65% APY.
  • Quontic Bank -0.65% APY.
  • Brio Direct -0.65% APY.

It is important to note that many banks often call their saving account as Money Market account instead of saving account, the money market accounts give the ability to write checks.

To get a high – yield online saving account is not simple you have to follow three steps.

  • Just give them your basic info like address /social security number.
  • Make a deposit now or do it later, it helps to set your goals in more easy ways.
  • Finally wait for the email for confirmation and start traveling towards the future which you are dreaming of.

From online bank interest earn over 5 x the National Saving Average.

 

Discover Online

Saving Account

  

Chase Regular Saving

  

City Bank

City saving

Access

Account

  

Bank of America

Advantage

Saving

  

Wells
Fargo

Way 2

Same

Saving

  

PNC Bank

Standard

Savings

  

Fifth Third Bank Goal Setter

Saving

  

U.S Bank

Standard Saving

  

Capital

One 360

Performance Saving

  

Ally Bank Online Saving Account
 

Interest

Compounded/

Paid

  

Daily/ Monthly

  

Monthly/

Monthly

  

Daily/

Monthly

  

Monthly/

Monthly

  

Daily/

Monthly

  

Monthly/

Monthly

  

Daily/

Monthly

  

Daily/

Monthly

  

Monthly/

Monthly

  

Daily/

Monthly
 

Monthly

fee

  

$ 0

  

$ 5

  

$ 4.50

  

$ 8

  

$ 5

  

$ 5

  

$ 5

  

$ 4

  

$ 0

  

$ 0
 

Insufficient

Funds fee

  

$ 0

  

$ 34

  

$ 34

  

$ 35

  

$ 35

  

$ 36

  

$ 37

  

$ 36

  

N / A

  

$ 25
 

Annual

Percentage

yield

  

0.50 %

  

0.01  %

  

0.04  %

  

0.01  %

  

0.01  %

  

0.01  %

  

0.01  %

  

0.01  %

  

0.40  %

  

0.50  %
 

Minimum

Opening

deposit

  

$ 0

  

$ 0

  

$ 0

  

$ 100

  

$ 25

  

$ 25

  

$ 0

  

$

  

$ 0

  

$ 0

 

There are some terms and conditions of saving accounts(3):

Interest: An account should be paid money from financial institution.

Compound Interest: In this type of interest you can earn both on original money and your accumulating interest, after daily/ monthly the return is added to your original principal.

Annual Percentage yield: This is the amount of interest that you earn in a year of making an account. This is totally based on the interest rate and the number of times of interest which is paid in a year.

To Saving Account have any tax: Unless you have earned less than $10 or your provider doesn’t give you a form to report it you have to pay taxes on your interest.

References.

  1. https://www.forbes.com/consent/?toURL=https://www.forbes.com/advisor/banking/types-of-savings-accounts/
  2. https://www.forbes.com/advisor/banking/best-online-savings-accounts/
  3. https://www.investopedia.com/savings-accounts-4689728