A savings account is when your money is kept in a bank or credit union and you earn interest. Interest is the amount a bank pays you for keeping your money there. Savings account involves safety, convenience and affordability. Instead of keeping a large amount of money at home, it is rather safer to keep it in the bank. When you do so, the bank takes the responsibility of your money and keeps it in a fireproof locked safe. The central government also insures your money. You can never lose your money when it is in the bank.

Banks pay you a fee in the form of interest, for keeping your money with them. Your earnings from the bank depend on the interest rates and the amount of money you keep. Transferring of money from your checking account to a savings account happens routinely and each payday makes paying yourself much easier.

Banks offer various types of ways for you to save your money and earn interest. Some of them are:

Basic Savings Account

Minimum deposit here is quite low, say from $5 to $200. Hence your money earns a comparatively low interest rate. But then you can put money into and take money out of your account whenever you want. This type of account is also called passbook account.

Certificate of Deposit (CD)
Here interest rates are higher than a regular savings account, but the minimum deposit is larger, generally between $1,000 and $5,000. You also have to keep your money in the CD for a particular period of time. You pay a penalty if you want the money before that period is complete.

Money Market Accounts
Again, here the interest rate is higher than the regular savings account, but the minimum deposit also becomes larger, averaging between $500 and $2,500. This account also limits the amount of times you can take out money each month.

To find out where to open up a savings account , you should search for a financial institution that meets your needs. Search for a bank or cooperative union that is near your home or work. It should be open during the hours you need it to be, charges to be low or no fees for a savings account. Banks and Community Development Credit Unions (CDCUs) are very safe and affordable places to open savings accounts. If the bank has the facility of online banking, it will make managing your finances very easy

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