Savings Account

an interest bearing deposit account held at a bank/financial initiation.

• typically: pay modest interest rate
• safe/reliable
• great for parking cash available for short term

Limitations on now often you can withdraw

• Ideal For emergency fund
• Short term-goals (baying a car, vacation)
• more surplus cash you don't need in your checking account: get more interest

How do they work

• sources of funds of financial institutions for loans
• interest rates vary
• some require a minimum
• The more competitive the rate the more it will fluctuate
• balance in order to avoid monthly fees.
• Earn highest published rate , others have none (balance requirement)

Advantages

• Places to put your money that is separated from everyday banking needs.
• rainy day / earmark funds to achieve a big saving goal
• Security - Federal Deposit Insurance Corporation (FDIC).
• saving accounts earn money
• impose hefty penalties if you withdraw your funds too early.
• at the same installation as primary (access very liquid: hard to get the cash)
• Checking accounts often has convenience and efficient benefits.
• transfer between accounts.
• more than one savings account

Disadvantages

• doesn't save like other saving accounts
• higher news with certificates of deposit/treasury bills
• invest in stock |bonds.
• Liquid: key benefits / downsides
• may tempt you to spend money you have saved
• More difficult to cash in bonds