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What Is a Savings Account?

A savings account is a kind of bank account which aims to put aside certain sums of money in order to earn interest. A savings account ensures that the account owner somehow has cash to use if the need arises and also works to make the money grow, if only by a small percentage. More than earning interest, a savings account differs from a current or checking account in that the money cannot be directly used as with checks. Still, it is relatively easy to access the money kept in a savings account. Customers may either visit the bank physically and withdraw money over the counter, or they can go to a cash machine and take money out using their ATM card.

Banks are the main financial institutions where people open savings accounts, but do note that other entities offer the same service. For example, credit unions also offer savings accounts to their members, often with better interest rates.
Savings accounts are a safe way to keep your money, and at the same time, it does provide a tiny trickle of income in the form of interest. You have to realize, however, that you will not become rich because of that interest. The interest rates for savings accounts are very very low, so this should not be considered as a source of income. Instead, it is what it says on the tin - a place to store some savings for a rainy day. If you are looking to make your money work harder for you, a savings account may not be the best option.

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