Types of Savings Accounts

Traditional

A basic savings account offering easy access to funds and a modest interest rate

High-yield

Offers a higher interest rate than a traditional savings account, often requiring a minimum balance or online-only banking

Money market

Provides check-writing and ATM access, along with a higher interest rate than a traditional savings account, but may require a minimum balance

Certificate of Deposit (CD)

A savings account that locks your money in for a set period with a higher interest rate than traditional savings, but access to funds is limited until the term ends

Cash Management Account (CMA)

Combines checking and savings account features, offering access to both, often through a brokerage account

Health Savings Account (HSA)

Specifically for healthcare expenses when you have a high-deductible health plan

IRA AND Roth IRA

Retirement savings accounts offering tax advantages

Student savings account

Accounts designed for saving for a child’s college education

Specialty Savings Account

Designed for specific savings goals, such as retirement, health expenses, or a child’s education

Liquidity of Traditional Savings

Highly liquid; can easily access your money when you need it without penalties or restrictions

Liquidity of high-yield

Highly liquid; can easily access funds

Liquidity of money market

Offers a good balance of liquidity and earning potential, but can have some limitations compared to traditional checking accounts

Liquidity of certificates of deposit (CDs)

Limited liquidity; not easy to convert them into cash without some potential drawbacks

Liquidity of a cash management account

Extremely high

Health savings account

Considered quite liquid (can access funds anytime with penalty for qualified medical expenses)

Liquidity of Traditional/Roth IRAs

Limited liquidity due to early withdrawal penalties and tax implications; although Roth IRAs offer more flexibility for withdrawing contributions

Liquidity of student savings accounts

Highly liquid, meaning you can access your funds quickly and easily

Specialty savings accounts

Generally offer high liquidity, meaning funds are easily accessible