1. Banking 101

Regular Savings Accounts

Almost all banks offer regular, basic savings account that you can sign up for in person, by phone, or online. This is the type of savings account you might get by default from a traditional brick-and-mortar bank. The difference between this account and a checking account is that it generally doesn’t have check-writing privileges and it may have a higher opening deposit requirement and, possibly, a higher daily minimum balance requirement. This type of account may be called “Statement Savings,” “Goal Savings,” “Day-to-Day Savings,” “Way2Save,” “Savings Plus,” or something else that the bank’s marketing department thought was clever.

A regular savings account is easy to set up and maintain. You can link it directly to your checking account at the same bank and quickly and easily move money between the two accounts. Having these two accounts linked can sometimes help you avoid overdraft charges and minimum balance fees from your checking account.

The main disadvantage of this type of account is its often-pitiful interest rate. The national average savings account rate as of June 2021 is just 0.06%, according to the FDIC. If you’re serious about making your money work for you, you’ll probably want to minimize the amount of money you keep in a regular savings account—if you use one at all—and opt for a more powerful savings vehicle instead.

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