Best savings accounts
Updated January 13, 2024

9 Best Savings Accounts for 2024

Saving Money

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If youโ€™re here because youโ€™re shopping around for a new bank, you probably already know how important your savings account can be. You probably also realize what a key role the right account can play in your financial strategy.

From a young age, we are taught the importance of saving money. Piggy banks hold our earnings and birthday proceeds as children, tucking them aside for some fun purchase down the road. As adults, we religiously save money each month for certain financial goals, like buying a home, paying for our kidsโ€™ college, and retiring successfully.

The difference is that a piggy bank on the dresser is no longer the best place to stash those funds, nor is your everyday checking account. Instead, we now need a dedicated savings account.

9 Best Savings Accounts for 2024

Comenity Bank

  • Comenity Bank: Best for Mobile App
    Open a Savings Account

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    • Basics: Comenity Bank offers a lot of perks: No fees, no minimum balance requirements, high interest compounded daily, and a great iOS or Android app that offers mobile check deposit and account management.
    • Pros: Comenityโ€™s online savings account offers an interest rate well above average, and the account is free of monthly maintenance charges, minimum balance requirements, and ACH transfer fees.
    • Cons: Youโ€™ll need to make a $100 minimum deposit to open the account. No local branches means no in-person assistance, and the bank charges for outgoing wires as well as withdrawals after the federal limit of six per month.
    Monthly fees 10/10
     
    Other fees 7/10
     
    Interest rates 8/10
     
    Ease of use 9/10
     
    Mobile Support 10/10
     
    Customer Support 6/10
     

Vio Bank

  • Vio Bank: Best for High-Yield Interest
    Open an Account Online

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    • Basics: With the highest interest rate of the banks listed here, Vio Bankโ€™s high-yield savings account is great for almost anyone. This high rate is applied regardless of your balance, and you can open an account with a $100 deposit.
    • Pros: The account comes with no fees or minimum balance requirements. Interest is compounded daily, and the 4.4-star Vio Bank app is available to help you manage your account and deposit checks on the go.
    • Cons: The bank is online-only, so there arenโ€™t any local branches to visit if you have questions.
    Monthly fees 10/10
     
    Other fees 10/10
     
    Interest rates 10/10
     
    Ease of use 8/10
     
    Mobile Support 8/10
     
    Customer Support 6/10
     

Synchrony Bank

  • Synchrony Bank: Best for Funds Access
    Open an Account

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    • Basics: Synchrony Bank offers higher-than-average interest with no balance requirement, and youโ€™ll get an ATM card for nationwide access to your funds.
    • Pros: Youโ€™ll get cash withdrawals from ATMs across the country that donโ€™t count against your monthly six-withdrawal limit, plus up to $5 per month in refunded ATM fees. The account has no fees, no minimum opening deposit, and no minimum balance. Interest is compounded daily.
    • Cons: You wonโ€™t have access to Synchrony Bank branches to manage your funds. There is no mobile app, either, so youโ€™ll be using the online platform and ATMs only.
    Monthly fees 10/10
     
    Other fees 10/10
     
    Interest rates 8/10
     
    Ease of use 9/10
     
    Mobile Support 1/10
     
    Customer Support 5/10
     

Capital One 360

  • Capital One 360: Best for Brick-and-Mortar Banking
    Open an Account

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    • Basics: Capital One 360 is the online arm of Capital One Bank. While they are separate entities, you can enjoy many of the benefits and securities of Capital One Bank as a 360 customer.
    • Pros: 360 Performance Savings accounts have no minimum deposit, no minimum balance requirement, and no monthly fees. The accountโ€™s feature-rich app is highly rated, and if you ever need help from a real human, you can walk into a local Capital One Bank branch for service on your 360 account.
    • Cons: The interest rate is competitive, but it isnโ€™t the highest around. Interest is compounded monthly, which wonโ€™t earn you quite as much as an account offering daily compounding.
    Monthly fees 10/10
     
    Other fees 10/10
     
    Interest rates 7/10
     
    Ease of use 10/10
     
    Mobile Support 9/10
     
    Customer Support 9/10
     

CIT Savings Builder

  • CIT Savings Builder: Best for Features
    Get a $200 Sign-up Bonus

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    • Basics: Sometimes, we need a little encouragement to stay on track toward financial goals. With CIT Savings Builder, youโ€™ll actually earn more for staying committed to saving.
    • Pros: As long as you have either a $25,000 minimum balance or deposit at least $100 into the account each month, youโ€™ll qualify for CITโ€™s top-tier interest rate. The account charges no maintenance fees, you can
    • Cons: If you donโ€™t meet the minimum balance requirement or save $100 or more each month, you wonโ€™t earn the high interest rate for that month. CIT Bank doesnโ€™t operate local branches.
    Monthly fees 10/10
     
    Other fees 10/10
     
    Interest rates 6/10
     
    Ease of use 8/10
     
    Mobile Support 10/10
     
    Customer Support 6/10
     

Marcus by Goldman Sachs

  • Marcus by Goldman Sachs: Best Free Account
    Start Saving

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    • Basics: Originally named GS Bank after its prestigious namesake, Marcus by Goldman Sachs is an online-only bank offering free savings accounts (among other products).
    • Pros: You can open as many savings accounts as you need, setting aside funds for various goals. Youโ€™ll face no minimum deposit requirements, monthly fees, or balance minimums, and interest is competitive.
    • Cons: If you need instant access to funds, Marcus may not be right for you. There are no local branches, no ATM cards or checks for the high-yield savings account, and transfers can take a couple of days to post. Marcus doesnโ€™t offer an app, either, so youโ€™ll have to do all account management through the website.
    Monthly fees 10/10
     
    Other fees 10/10
     
    Interest rates 7/10
     
    Ease of use 7/10
     
    Mobile Support 1/10
     
    Customer Support 6/10
     

Discover

  • Discover Online Savings Account: Best Fee-Free
    Bank With Discover

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    • Basics: Discoverโ€™s Online Savings Account offers a competitive interest rate and never charges fees โ€” like, ever.
    • Pros: Interest is compounded daily on this free account, earning you maximum returns. There are no minimum deposit or balance requirements, no monthly or maintenance fees, and no fees for things like NSFs, stop payments, excessive withdrawals, or account closures.
    • Cons: Discover doesnโ€™t operate brick-and-mortar branches, so if youโ€™re an in-person banking customer, think twice. Rates are competitive, but you can find higher options.
    Monthly fees 10/10
     
    Other fees 10/10
     
    Interest rates 7/10
     
    Ease of use 8/10
     
    Mobile Support 8/10
     
    Customer Support 6/10
     

Ally

  • Ally Online Savings: Best for Low Initial Deposit
    Open an Account

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    • Basics: Ally is known for its easy, feature-rich, and fee-free savings products. With its online savings account, you can enjoy an excellent rate without a minimum balance requirement, along with a ton of other features.
    • Pros: Ally charges no monthly or maintenance fees, no minimum deposit, and no balance requirement. ACH transfers (even expedited ones) are free, as are incoming and outgoing wires, and cashierโ€™s checks. Youโ€™ll have access to more than 43,000 network ATMs across the country. Ally customer service is available 24/7.
    • Cons: Because there are no local bank branches, you wonโ€™t be able to deposit cash into your Ally account.
    Monthly fees 10/10
     
    Other fees 10/10
     
    Interest rates 7/10
     
    Ease of use 10/10
     
    Mobile Support 8/10
     
    Customer Support 8/10
     

Popular Direct

  • Popular Direct: Best for Large Balances
    Open a Savings Account

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    • Basics: If you have a little more cash set aside and want to maximize your return, Popular Directโ€™s Ultimate Savings is a great โ€” if lesser known โ€” choice.
    • Pros: This high rate is applied to all balance tiers, so youโ€™ll enjoy competitive interest regardless of how much you have in the account. Interest is compounded daily to maximize your earnings.
    • Cons: Youโ€™ll need to make a minimum deposit of $5,000 to open an account. If your balance falls below $500 at any point, youโ€™ll be charged a $4 monthly service fee for that month. If you close your account in the first 180 days, there is also a $25 early closing fee.
    Monthly fees 7/10
     
    Other fees 8/10
     
    Interest rates 10/10
     
    Ease of use 8/10
     
    Mobile Support 8/10
     
    Customer Support 6/10
     

What Is a Savings Account?

A savings account is similar to a piggy bank, except a banking institution holds the funds you want to save and keeps them safe on your behalf.

Savings accounts are accessed, managed, and categorized a bit differently from other account types, such as those designated for everyday checking. For instance, while checking accounts rarely offer significant interest, a savings account has the potential to grow quite a bit.

Your bank will offer an interest rate โ€” free money your account will earn โ€” in exchange for allowing it to hold your savings. The interest earned will be added to your account balance, where it will continue to increase over time.

Most savings accounts allow you to initiate an electronic transfer, request a bank check, withdraw cash at a local branch, or write a check or use a debit card to withdraw money from the account.

Reasons to Use a Savings Account

Savings accounts come in many flavors, and there are endless reasons you may want to open and start funding one.

No matter the what or why, though, this fact remains: A savings account can be a valuable addition to your financial plan. You may even need more than one accountโ€ฆ but having and funding at least one is vital to your personal finance journey.

How to Use a Savings Account

You could use a savings account to:

  • Build an emergency fund for unexpected expenses.
  • Save for big future purchases, such as a new car or the down payment on a home.
  • Build extra cash for joint goals, such as a family vacation.
  • Keep โ€œfun moneyโ€ out of sight to curb temptation.
  • Earn interest on your short-term savings until itโ€™s time to spend the funds.
  • Tuck away money for big annual expenses, such as property taxes or insurance premiums, to take the sting out of the payment.

Meet Your Financial Goals

Aside from being a vehicle for your money, savings accounts can actually help you better meet your goals.

You could earn interest (free money) on the balance, and some banks offer features such as monthly auto-transfers and โ€œrounding upโ€ your checking account purchases to contribute to savings.

No matter why youโ€™re putting money aside, the right savings account will make it easier to meet your goals.

Earning Interest on Savings

Weโ€™ve all heard stories of cash hidden under mattresses or in coffee cans in the freezer. I would commend those folks for saving for a rainy day, but I would also advise that there is one important thing they are missing out on by skipping the bank: interest.

Almost all savings accounts will earn interest on the balance. The interest rate โ€” or amount of interest relative to the balance โ€” offered varies from bank to bank, between account types, and can even change from one day to the next according to market trends.

At the end of the day, though, even a low interest rate is better than nothing. This interest will help the value of your savings keep up with inflation, as well as grow your balance over time. (Plus, no one will accidentally throw your money out while cleaning the freezer!)

High-Yield Savings

Some savings accounts are considered โ€œhigh yield.โ€ These types of accounts, typically found at online banking institutions, offer interest rates that are as much as 200 times more than what youโ€™ll find at the average branch down the road.

With one of these accounts, you can enjoy significantly higher returns on your savings.

Is Savings Account Interest Taxable?

The interest your balance earns is essentially free money. But it is also considered taxable income.

You will receive a statement and a 1099-INT from your bank after the yearโ€™s end. While you will only need to pay taxes on interest over $10, you will need to report all of the proceeds from your savings account(s) on your tax return.

How Many Savings Accounts Can You Have?

If you want to use one savings account for your emergency savings, another for that exciting anniversary trip you have planned next year, and yet another for the down payment on your future home, thatโ€™s perfectly fine. In fact, for many people, this is preferable.

By separating savings based on goals, you know where you stand with each at all times. You wonโ€™t inadvertently pull from your emergency savings when paying for an upcoming vacation, and you can easily allocate funds into each account each month.

Many banks allow customers to create any number of free savings accounts, which are typically connected within the banking platform. Some banks limit this to two or three accounts, while others, such as Marcus and Capital One 360, donโ€™t state a limit.

You can also open accounts at multiple banks, if having all of your savings in one place would be too tempting. Sometimes, it can be helpful to have your funds out of sight, out of mind.

The Difference Between Checking and Savings Accounts

Many banks offer both checking and savings products, and they can often function mostly the same. So, whatโ€™s the difference between the two, and why would you need one over the other?

Savings Accounts Have Withdrawal Limits

Whenever you need to access the funds in your checking account, you can. Whether thatโ€™s making multiple purchases a day from the account or paying your big bills each month, thereโ€™s no limit.

Thanks to a federal rule known as Regulation D, savings account holders are limited to six withdrawals or outgoing transfers in a statement period. This rule applies to savings and money market accounts, and it can impact how and when you access your money.

Going over this limit may result in fees, warnings, or your account eventually being closed.

Interest Is Usually Earned on Savings, Rarely on Checking

There are some checking or spending accounts that offer interest on balances especially those at credit unions and digital banking platforms. However, interest-bearing or rewards-based checking accounts are not common.

Earning interest on your savings account balance, though? Thatโ€™s practically a given.

Some savings accounts offer hardly anything in terms of rates, while others rival the returns of popular CDs. Shop around for the best rates and features before depositing your funds to maximize your return.

Checks and Debit Cards Are Rare

Being able to access and spend your money when you need it is a key requirement of your bank account(s). With checking accounts, you have the ability to withdraw funds at a local branch, access cash through an ATM card, write checks, or use a debit card when shopping.

With savings accounts, though, access is different. Some accounts offer checks or debit cards for customers. This isnโ€™t common, though, and youโ€™re still limited to six withdrawals per cycle.

Most often, withdrawing the funds in your savings account will require an electronic transfer, an official bank check, or a withdrawal at a local branch.

The Intent of the Account Is Different

The intent is different between a checking account and a savings account. Checking accounts are designed for everyday spending: short-term funds that you plan to spend on needs or wants, or money to have on hand for expenses that come up.

Savings accounts are designed for savings. This is long-term money you are putting away for a rainy day or to pay for something big, like a new car or wedding.

Keeping this money together โ€” when itโ€™s earmarked for different types of spending โ€” can be dangerous.

Should You Keep Checking and Savings at the Same Bank?

So, you know that you need both checking and savings accounts. Now the question is, should you open them at the same bank or different banks?

There are a few benefits to using one institution:

  • Keeping checking and savings at the same bank allows for quick transfers between the accounts.
  • You can monitor both account balances easily if theyโ€™re on the same platform.
  • Banks may offer bonuses or special perks (like waiving monthly account fees) if you have both account types.
  • It is easier to manage at a single bank, rather than keeping things straight across multiple banks.

There are also many reasons you may spread them out:

  • You may be tempted to dip into savings if the funds are too accessible. Putting them out of sight โ€” and away from immediate transfer options โ€” can curb those habits.
  • Many online banks offer savings products only. You can earn a much higher interest rate on your savings there, but youโ€™ll need to keep a checking account elsewhere.
  • You can maximize bank account bonuses when you open new accounts at multiple institutions.

Which is right for you comes down to your spending and savings habits, how dedicated you are to your goals, and how quickly you may need to access your savings.

Why Online Savings Accounts Are (Usually) Better

If youโ€™ve never looked into an online savings account, you may not know what all the fuss is about. You might even be hesitant to consider opening an account at one of these institutions, as they donโ€™t have brick-and-mortar branches and arenโ€™t often well known.

However, for most customers, online savings accounts are far superior to the accounts offered by traditional banks, because:

  • They offer higher interest rates on average. With a high-yield savings account, you can earn up to 200 times what youโ€™d get with an average savings account.
  • They have a much lower overhead, so they can often offer better perks, like fee-free accounts.
  • Sometimes they have better account management options. Because online banks know you canโ€™t pop into a local branch to manage your money or ask a question, they usually put a lot more into their apps, online platforms, and customer service options.

The Cons of Online Savings Accounts

Still, online savings accounts arenโ€™t right for everyone. Depending on how you like to manage your money, you might find a traditional bank is a better choice.

No brick-and-mortar branches: With a few exceptions (Capital One 360 being one of them), you typically wonโ€™t have access to local branches when using an online bank. If you like being able to deposit checks in person, pop in to ask questions or to withdraw cash, this could be a deal-breaker.

Limited product offerings: Some online banks offer everything you could need. Others specialize in savings accounts and may not offer products such as CDs (certificates of deposit), MMAs (money market accounts), or checking accounts, and may not be able to give you everything in one place.

Lack of features: An online bank is easy to manage when you have access to top-rated apps, mobile check deposit, electronic transfer between your accounts, and more. Unfortunately, not all banks have these features.Pay attention to how you bank and what you need most when shopping around to avoid frustration.

How to Use Your Savings Account

Your savings account, and how you use it, is limited only by your imagination.

You can โ€” and should โ€” open a savings account to house an emergency fund in case of unexpected expenses. You should also aim to have three to six months of expenses saved as a safety net, which you can put in the same account or a second one.

If youโ€™re saving for big future plans, like buying a house or paying for a wedding, the right savings account will go a long way. You can automate your savings to reach your goal, while keeping your money ever-so-slightly out of reachโ€ฆ and earning interest while it sits.

Some people use savings accounts for short-term goals. For instance, you might use a credit card for everyday spending so you can earn points. Then, each time you make a purchase, youโ€™d transfer that amount into savings. That way, you can pay your bill in full at the end of the month without feeling any pinch.

Savings accounts are also great for setting aside money for one-off annual expenses, such as insurance premiums, property taxes, income taxes, new tires, or vehicle registration, so you are prepared when the bill comes due.

No matter where your money goes or what your short- and long-term goals are, savings accounts can make the process easier.

How Much Should I Have in Savings?

There is no set dollar amount that you โ€œshouldโ€ have in savings at any given time. Rather, itโ€™s a matter of putting away a percentage of your income, as well cutting spending as much as possible in your everyday life.

With that said, here are a few savings goals you could aim for:

Have an emergency fund. A shocking 39% of Americans couldnโ€™t cover an unexpected $400 expense with cash, according to a 2018 Federal Reserve report. This means a sudden vehicle repair, childโ€™s broken arm, or even a baseball through the living room window could set off a spiral of credit card debt. Set an initial goal of $1,000 for an emergency savings account, then aim higher.

Create a safety net. Layoffs, injuries, illnesses, natural disastersโ€ฆ All these can deplete your savings and impact your ability to work. By saving up at least three to six months of expenses, you give your family a safety net in a worst-case scenario.

Save for large annual expenses if they put a pinch on your cash flow. If paying your property taxes or other large, one-off expenses derails your bank account for weeks or months, use a savings account to prepare. By saving a portion of this expense each month in a dedicated account, youโ€™ll ease the annual burden.

How Much Does the Average Person Have in Savings?

According to recent data from Bankrate, 28% of adults have zero savings to their name.

That concerning stat doesnโ€™t tell the full story, though, and there are many Americans who are doing a great job of saving for both their future and emergencies.

For example, while 28% of respondents had $0 in savings, 29% had greater than six monthsโ€™ worth of expenses saved. The household savings average (including the $0 folks) was around $8,863.

And this doesnโ€™t take into account retirement savings. While Americans could definitely be saving more, the message is mostly getting through.

Savings Account Features to Look For

When shopping for a new savings account, banks will offer a variety of features on different products. Which are most important, and what should you look for in your search?

The features that are arguably the best, or most important, include things like:

  • No monthly fee.
  • Mobile check deposit.
  • High-yield interest rate.
  • Multiple free accounts, for each of your savings goals.
  • Easy ACH transfers (such as direct deposit and bank-to-bank transfers).

Depending on how you manage your money, you might also look for:

  • Local branch access.
  • Accounts offering checks or ATM cards.
  • Automatic transfers.
  • An easy-to-use online platform and/or mobile app.
  • Additional savings products that fit your goals, such as CDs and MMAs.
  • Sign-up bonus.

Savings Account Fees to Watch For

Some banks pride themselves on fee-free accounts. Others may try to nickel and dime you every step of the way. Research the account youโ€™re thinking about opening โ€” and consider your typical banking habits โ€” before making a choice.

The most common savings account fees include:

  • Monthly fees or maintenance fees: These can sometimes be waived by meeting direct deposit, minimum balance, or other account requirements.
  • Over-limit withdrawal fee: If you go over your federally-allotted withdrawal limit in a  statement cycle, your bank may charge you a fee per transaction.
  • Changing rates: While this isnโ€™t a โ€œfee,โ€ it is an added expense to watch out for. Some banks offer high teaser APY to draw in new banking customers. After a period, that rate will drop substantially, and your savings will suddenly be earning a much lower return.

Less common fees include things like:

  • Incoming and outgoing wire transfer fees.
  • ATM card fees.
  • Overdraft fees.
  • Stop payment fees.
  • Paper statement fee.
  • Replacement card fee.
  • Returned item fee.

Many savings accounts also have minimum deposit requirements to open a new account.

Types of Savings Accounts

There are a few savings vehicles you can use to stash funds for the future. While each one has similarities to a typical savings account, there are a few key differences.

Savings Accounts vs. Money Market Accounts

Savings Accounts vs. Money Market Accounts
AccountHigh-yield Interest AvailableFederal Withdrawal LimitChecks ProvidedATM Card ProvidedMinimum Deposit Requirement
Money Market AccountUsually as high or higher than savings accounts.
6 Transactions per Month
Common
Common
Common, and sometimes notably higher than savings account requirement.
Savings AccountYes, especially at online banks.
6 Transactions per Month
Rare
Rare
Sometimes, but not always.

The account most similar to traditional savings is the MMA, or money market account. In fact, many customers have trouble telling the two apart, they are so alike.

The primary difference between savings accounts and money market accounts is the ability to write checks from the account or use an ATM card. While checks and cards are rare with savings accounts, itโ€™s usually assumed that customers will be provided with these to access the funds in an MMA.

The other common differences between savings accounts and MMAs are:

  • MMAs usually offer interest rates as high as, if not higher than, savings accounts at the same bank.
  • MMAs almost always have a minimum deposit requirement to open an account, while these are not always required for savings accounts. MMA deposit requirements can be quite high, depending on the bank.

Savings Accounts vs. Certificates of Deposit (CDs)

Savings Accounts vs. Certificates of Deposit (CDs)
AccountHigh-yield Interest Rates Funds Are LiquidMinimum Deposit RequiredInterest Rates Can Change Withdrawal Penalties
Certificates of Deposit (CDs)Yes; longer terms are often at significantly higher rates than those offered by savings accounts.No; when you commit to a CD, you agree not to touch those funds for a specified period of time (early withdrawals are possible, but fees are significant).Yes; these requirements can be hundreds or thousands of dollars.No; when you choose a traditional CD, your rate will be locked in for the duration of the term.Yes; unless you choose a no-penalty CD, expect that early withdrawals will include very high penalties.
Savings AccountYes, though savings account rates can often exceed those offered by short-term CDs.Yes; you can deposit into or withdraw from your account at any time, assuming that you donโ€™t surpass federal monthly withdrawal limits.Sometimes, but many no-minimum accounts are available.Yes; your savings accountโ€™s APY can change from one day to the next.No; the only penalty you may encounter is if you surpass your monthly six-withdrawal limit.

Many banks offer CDs, or certificates of deposit, in addition to savings accounts. These products are designed to be a safe place to store savings while also recognizing a market-leading return.

There are a few important things to note about CDs, though: Namely, you are essentially locking away your savings when you open one.

Rather than having an account you can add to or withdraw from at any time, as with a savings account, CDs are designed to lock away a set deposit amount for a set period of time at a set rate. Breaking that agreement can be detrimentalโ€ฆ and pricy.

Some CDs include rate-boosting features, where your rate can be bumped to reflect market chances; or no-penalty products, where you are not fined for withdrawing funds early. With traditional CDs, though, you wonโ€™t be able to change your rate or touch your money without penalty until the term is up.

Itโ€™s important to shop around if youโ€™re considering a CD versus a savings account. Many high-yield savings accounts have interest rates that rival or beat those offered by shorter-term CDs and without the risk.

However, long-term CDs almost always offer a better return. Just be sure you can afford to put that money away and not touch it until your CD matures.

Savings Accounts vs. Investments

Savings Accounts vs. Investments
Savings Accounts
Investment Portfolio
No Risk

You will never lose your principal investment in a savings account-- the funds can only grow.
Definite Risk (Varying Levels)

Some investments are more risky than others, but all investments have the potential to lose money.
Predictable Growth
Unknown Growth
Your savings rate will fluctuate slightly over time, but you will always know how much your money is earning on a given day.Investments are based on market fluctuations. These can change drastically from one hour to the next.
Liquidity

You are able to withdraw funds from your savings account at any time, without penalty.
Difficult to Access

Funds Selling investments to access those funds can be a lengthy process, and there may be fees involved.
Safe Savings = Low Returns

The funds in a savings account will grow safely, but at a low and slow rate of return.
Potential for High Return

In exchange for accepting the risk of the market, you have the potential to earn a much higher return on your investment.
Free Options

There are plenty of no-fee savings accounts available, giving you an entirely free way to grow your funds.
Fees Vary

You will likely encounter expenses in the form of management fees, expense ratios, and trade fees.

Your investment portfolio is not technically a savings account, but because this money is considered part of your overall โ€œsavings,โ€ itโ€™s worth mentioning.

There are many reasons you may put your money in a traditional savings account, just as there are plenty of reasons to opt for investing instead. If you are trying to grow your net worth while maximizing both your short- and long-term goals, though, itโ€™s usually smartest to direct your efforts at both of these savings vehicles.

Whatโ€™s the difference between putting your funds in savings versus investing them in, say, a mutual fund? There are plenty.

You should actually put your efforts into both a savings account and an investment portfolio. Each serves a purpose, and will help you grow your savings to meet future goals.

  • Savings accounts are great for funds that need to be readily accessible, such as emergency funds or short-term savings, like money for a new car.
  • Investments are great for long-term financial goals, such as your childrenโ€™s education or your retirement.

Is Your Money Safe in a Savings Account?

All of the banks mentioned here are FDIC insured. This means your funds are protected if something happens to the bank. Savings deposits are protected up to the FDIC limit of $250,000 per depositor per bank.

Additionally, your money is less at risk when deposited into a savings account versus an investment portfolio. While the interest earned can vary with the market, your savings will never lose value the way an investment portfolio could.

Ready to Start Saving?

Tucking your savings away in an FDIC-insured, interest-bearing savings account is one of the smartest things you can do. Your money will be protected, and youโ€™ll be able to better meet your goals, track your progress, and earn some notable interest in the process.

Whether you open one savings account or 12, the important thing is that you are planning for the future. And when the unexpected strikes, or you meet a big and exciting goal, youโ€™ll be thankful you did.

Author:

Stephanie Colestock

Stephanie Colestock is a personal finance expert and writer who enjoys teaching people how to be financially independent and confident about their money choices, regardless of obstacles in their path (such as the crippling student loan debt she once held). Stephanie graduated from Baylor University, and is currently working toward her CFP certification. Her work can be seen on sites such as Forbes, Dough Roller, and Johnny Jet, among many others.

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