After checking accounts, savings accounts are the next offering most people think about when they think about banking. Having a savings account where you can securely store extra cash that you can access easily in an emergency—but not so easily that you’ll spend the money on things you didn’t intend to—is a key component of any good personal financial plan. While a checking account helps safeguard your money and facilitate bill paying, simple savings account helps you set aside money for near-term goals like going on a vacation, paying a large upcoming bill, or establishing an emergency fund.
There are a number of different types of savings products that banks offer; ahead are the pros and cons of each. First, we will cover the two types of savings accounts.