Money that is considered savings is often put into a low risk, interest-earning account, rather than into higher risk investments. Although there is opportunity for larger returns with certain investments, the idea behind savings is to allow the money to grow slowly with little or no associated risk. The advent of online banking has increased the variety and accessibility of savings accounts and vehicles. Here are some of the different types of accounts so you can make the most of your savings.
1. Savings Accounts
Savings accounts are offered by banks and credit unions. The money in a savings account is insured by the Federal Deposit Insurance Corporation (FDIC) up to specified limits. Certain restrictions may apply to savings accounts; for example, a service fee may be charged if more than the permitted number of monthly transactions occurs.
Money in a savings account typically cannot be accessed through check-writing or ATMs. Interest rates for savings accounts are characteristically low; however, online banking does provide higher-yielding savings accounts. (Even with inflation fears, saving money is still sage advice in a recovering economy. Check out How Savings Are Saving The Economy.)
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