Different Savings Accounts for Your Money

When people think of savings, they usually don’t realize all of the account possibilities that are available. There are actually numerous different account options that people can choose to store their savings in. It can have a serious impact on how you manage your finances!

A Typical Savings Account

One of the most common ways that people store their money is in a savings account. These accounts are at your local financial institution like a credit union or a bank. It is popular amongst consumers because of convenience. If you need to do anything with the account, a local branch or ATM may be able to help.

Unfortunately, even though these accounts are convenient, they don’t accrue that much interest. These accounts usually earn an annual percentage yield between .01% to .30%. For example, if you had $1,000 in your savings account for a year, you could only have $0.20 accrued in interest. Interest rates vary depending on where you are banking as well as the type of account.

A High Yield Savings Accounts

High yield savings accounts are just like a typical savings account except it offers higher interest rates to consumers. These interest rates are usually found at online banks compared to a normal brick-and-mortar. Even though you may not have as much convenience with this banking option, you make up for it with the interest rates.

For example, if you had $1,000 in your account for a year, you may be able to earn $1.50 in interest at the end of the year compared to a traditional account at $0.20. It is up to you to decide if the lack of a physical location is worth those interest rates or not.

A Cash Management Account 

This is ideal for short-term and medium-term savings. These accounts are provided by financial institutions and allow you to manage your cash transactions with one platform. Many people opt for this type of account due to the fact that it offers some better visibility. People that would best benefit from these account types usually have multiple investments.

Mutual Funds/Money Market Savings

Another savings account type is a money market account. There are two types of money market accounts. One is a money market savings account and the other is a money market mutual fund account. These money market savings accounts act like typical savings accounts except for two key differences. The first difference is their interest rate. Money market accounts could pay higher interest rates or even offer a custom rate based on your finances. The second difference is that these accounts could have more capabilities and offer opportunities like check-writing abilities or a debit card.

Money market mutual funds are a completely different story. Unlike other savings accounts that are offered at a bank, these accounts are offered by investment companies. It is important to note that these market mutual funds are not FDIC insured. There is a high risk factor involved due to the fact that the funds are invested in the market. These accounts could also have expensive fees associated with them, so this option isn’t for everybody.

Treasuries and Savings Bonds

The U.S. government issues bonds. These bonds are then backed by its full credit and faith. These bonds have a maturity date for when it will reach its peak value. This time frame is usually between two to three decades.

These bonds accrue interest each month. They can be cashed at any time but if you don’t wait until the maturity date you could lose out on a bit of interest. These bonds can be bought at a majority of banks or online. Treasury Direct is the online source for purchasing these bonds.

Another good option for financial security with high interest rates are U.S. Treasuries. Treasuries are available for purchase with both short or long maturity terms. You can begin saving with this type of account for as little as $100. These accounts have fixed interest rates, and the amount of interest you get increases as the maturity term increases.

Certificate of Deposit (CD)

If you have a specific money goal in mind, this may be a great account option for you. These accounts can help you earn a specified interest amount. This interest can be applied to the funds that you will use for that set financial goal. These account options can have strict penalties when it comes to taking cash out of the account early. It is important to note that CDs may have different setups depending on the financial institution you go to. There could be options that don’t have penalties associated with them. Just make sure to review the different account terms and conditions before signing up.

A 529 Savings Plan

Many people haven’t even heard of this type of savings account option. This is a type of tax-advantaged investment account that is a useful tool for parents. Parents have the ability to put money aside in these accounts to go towards the cost of education for their children. These accounts have the ability to earn compounding returns.

These accounts vary by state. There are also guidelines as to what is determined to be an educational expense. All of this information and more should be considered before deciding if this is an account you want to use.


It is very important to make sure you have a  solid savings account. Savings provide an emergency cushion when you have to deal with unexpected situations. Due to the fact that there are so many different types of savings accounts, it would benefit you to research what would be best for your financial situation.

It is also worth noting that interest rates do not stay the same. Since these are changing all the time, it is especially important that you do your research before deciding on an account. This can help you make the best decision for your savings and get you more money in the long run. If you have any questions be sure to go over them thoroughly with your bank.