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Types of Savings Accounts

Financial institutions offer a variety of savings accounts, each of which pays a different interest rate. Below is a description of the different types of savings accounts.

Savings Accounts (in general)

  • Access your money at any time
  • Earn interest
  • Move money easily from one account to another
  • Have your savings insured by the FDIC up to $250,000

Money Market Savings Accounts

  • Earn interest
  • Pay no fees if you maintain a minimum balance
  • May offer check-writing services
  • Have your savings insured by the FDIC up to $250,000

Certificates of Deposit

  • Earn interest during the term (3 months, 6 months, etc.)
  • Must leave the deposit in the account for the entire term to avoid an early-withdrawal penalty
  • Receive the principal and interest at the end of the term
  • Have your savings insured by the FDIC up to $250,000

New Deposit Insurance Limits—The standard insurance amount of $250,000 per depositor is in effect through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except IRAs and other certain retirement accounts, which will remain at $250,000 per depositor.

Source: Federal Deposit Insurance Corporation