How Does Traditional Savings Account Work

These accounts usually require either a low minimum balance like 25 or may require no minimum balance at all.

How does traditional savings account work. The most common type of bank account and probably the first account you ll ever have after a checking account is a savings account. So how exactly does a savings account work. Compare this to most investment accounts where the values go up and down due to market fluctuations. Savings accounts allow you to keep your money in a safe place while it earns a small amount of interest each month.

This high apy competitive with that of money market accounts makes her savings account more suitable for a long term investment. As of this writing the. A savings account is a type of bank account where you store money that you ve earned but with the added benefit of earning interest on that money. The apy of her online savings account started at 3 an enormous increase over her 0 5 apy on her traditional savings account.

You ll then deposit at least enough to meet. Traditional savings accounts are liquid meaning you can withdraw money today or whenever you need it without paying a financial penalty. With that in mind here s a rundown of how savings accounts work. Online savings accounts generally pay much more interest than traditional savings accounts do.

We ve got the answers about how the interest rate annual percentage yield and more factor into a savings account. If you re thinking about opening a traditional savings account here s how it works.