What Type of Savings Accounts Are There?

If you’re worried about the economy, now might be a good time to take a close look at your financial state of affairs, where you’d like to be, and what you’re planning for. Every day there’s more bad news coming in from all sectors of the economy, and you have to wonder when – and where – the layoffs are going to stop. Everyone needs to be smart in times like these, no matter what our jobs might be, or how safe we think they are. One thing that is considered to be universally smart is to put money aside in a savings account. The type of savings account you choose is very important.

Most savings accounts are the traditional kind. To open one of these, you simply go into a bank or log on to an online banking site, and take the required steps to get started. If you simply want to put money aside without thinking too much about it beyond that, this is your best bet. You’ll get a decent interest rate, and your savings will be insured by the FDIC (as all savings accounts are, up to $100,000). This traditional interest savings account makes a lot of sense for just about everyone.

Other kinds of savings accounts are out there which promise higher interest rates but require much more in return than a traditional savings account. They may need much higher opening deposits, for example. Usually, the higher the savings interest rate offered by a bank or other financial institution the more money required to open an account. Other accounts will require that no money can be withdrawn at all until after a certain amount of time has elapsed. That kind of account is not going to be the right fit for someone who needs access to their cash. Finally, rules and regulations can vary by state and of course, by country.

To determine which kind of savings account works best for you, be sure to meet with your financial advisor and go over all the options that are available in as much detail as you need.