8 types of savings accounts: Where to save your money
Key takeaways
- High-yield savings accounts pay up to around 4% APY — 400x more than traditional savings accounts at 0.01% — making them the best choice for emergency funds and short-term savings goals.
- CDs lock your money for fixed terms in exchange for guaranteed rates, while money market accounts offer checking-like features with savings-level interest.
- Tax-advantaged accounts — like HSAs, IRAs and Roth IRAs — serve specific purposes and shouldn’t be used for general emergency savings despite their benefits.
- Match your account choice to your timeline: high-yield savings for 0 to 2 years, CDs for 1 to 5 years and retirement accounts for goals of 10 years or longer.
Banks commonly offer multiple varieties of savings accounts, although they’re not created equal. Options like traditional savings accounts, high-yield savings accounts, money market accounts and certificates of deposit (CDs) all hold your cash, but they don’t pay the same rate or come with the same rules.
You’ll want to compare rates, liquidity and other features, to find the best mix of accounts for your savings goals and timeline.
Quick comparison: 8 types of savings accounts
For most people’s primary savings, high-yield savings accounts offer the best combination of high interest, daily access and FDIC insurance. Consider using the other account types for specific purposes, not as your main emergency fund.
| Account type | Best for | Typical APY | Liquidity | FDIC insurance | Monthly fees |
| Traditional savings account | Convenience at your current bank | 0.01% | High (daily access) | Yes | Often $5-$12 (waivable) |
| High-yield savings account | Emergency funds, short-term goals | Around 4% APY | High (daily access) | Yes | Usually $0 |
| Student savings accounts | Students under 18-24 | Up to 4% APY | High (daily access) | Yes | Usually $0 |
| CDs | Money you won’t need for 1-5+ years | Up to 4.50% APY | Low (early withdrawal penalty) | Yes | Usually $0 |
| Money market accounts | Hybrid checking-savings needs | Around 4% APY | High (daily access) | Yes | Varies, $0-$15 |
| Cash management accounts | Brokerage cash, multi-bank spreading | Around 3%-4% APY | High (daily access) | Often via partner banks | Usually $0 |
| Health Savings Accounts (HSA) | Medical expenses (requires HDHP) | Depends on investments | High (for medical only) | Varies by provider | Varies, $0-$5 |
| IRA/Roth IRA | Retirement (10+ years out) | Depends on investments | Low (early withdrawal penalty) | Varies by holdings | Varies by custodian |
Which savings accounts are best for you?
The types of savings accounts you choose should help you achieve your savings goals. As you explore your savings options, think about your wants and needs. For instance, consider how much you value security and liquidity, whether you want the highest return regardless of accessibility or if you are looking to use your contributions to optimize your taxes.
Be honest with yourself about the amount you can afford to put in savings. Start by building an emergency fund that you can access easily. Then, work toward other savings goals with the account that best suits your needs.
[Callout] Depending on where you are in your financial journey, you will likely have two or three types of savings accounts at once. A common setup might be:
- High-yield savings account for an emergency fund containing six months of expenses.
- High-yield savings account or CD for a short-term goal with a set date, like a vacation, new car or home renovation.
- IRA or Roth IRA for retirement savings.
1. Traditional savings account
Bankrate’s take: A traditional savings account is good for keeping your money all in one place and being able to quickly access your savings. But the convenience comes at a price — you can get a much higher APY and retain the same liquidity with a high-yield savings account.
What it is: The basic savings account offered by most banks and credit unions. You can deposit and withdraw money at any time, and it earns variable interest.
Current rates: Interest rates on traditional savings accounts are generally low compared with other savings products. The national average savings account yield is 0.63% annual percentage yield (APY), according to Bankrate data. Some big banks pay even less — Chase, for example, pays just 0.01% APY on its standard savings account.
That gap adds up quickly. A $10,000 emergency fund earns just $1 a year at Chase, versus around $400 a year in a high-yield savings account — a $399 difference for holding the same balance. Traditional accounts can make sense if you value branch access or keeping everything at one bank, but that convenience comes at a real cost.
Monthly fees: $5-$12 at many traditional banks (often waived with minimum balance of $300-$1,000). Typically $0 at many credit unions.
Accessibility: Daily access via transfers, ATM withdrawals or in-branch withdrawals. Some banks only permit up to six withdrawals from savings per month, although this is no longer required by federal law.
2. High-yield savings account
Bankrate’s take: These online accounts are good for emergency funds and short-term savings goals, like vacations, down payments and car purchases within the next one to two years. The largest potential downside is many high-yield savings accounts don’t support cash deposits.
What it is: A savings account that pays significantly higher interest than a traditional savings account, typically offered by online banks with lower overhead costs.
Current rates: High-yield savings accounts pay far more than traditional ones — top rates hover around 4% APY, compared with just 0.01% APY at many traditional banks. Online banks can offer these higher rates because they don’t carry the costs of maintaining branches.
Monthly fees: Usually $0. Most high-yield savings accounts have no monthly fee or minimum balance requirement.
Accessibility: Getting to your money can be more limited than with a traditional account. Some high-yield accounts at online banks don’t allow for cash deposits or ATM access, which limits you to electronic transfers. You may find this trade-off worth it for the high yield.
Unless you have a specific reason to use one of the other account types, high-yield savings accounts offer the best combination of high interest, safety, and accessibility.
3. Student savings account
Bankrate’s take: If you’re just starting out on your savings journey, you may find a student savings account useful — especially if your school or parents prefer a specific bank. If you’re over 18, a normal high-yield savings account could be a better option, even if you want to keep a parent on as a joint owner.
What it is: A student savings account is exactly what it says on the tin — a savings account designed for young people (typically under age 18-25) with features tailored to students. Often these come with no monthly fees, low or no minimum balance requirements and sometimes financial education tools.
Current rates: Rates on student savings accounts tend to be low to middling. You can find better rates with many regular high-yield savings accounts.
Monthly fees: Usually $0 while you’re a student under around age 25; may convert to a regular account with fees after you age out.
Student savings accounts are useful for teaching banking basics, but they often pay lower rates than a high-yield savings account. They make sense mainly if you’re younger and need a parent as joint owner. Once you’re 18 and can open accounts on your own, go straight to a high-yield savings account instead.
Accessibility: Just like with a regular, non-student account, you’ll often have an ATM card, online and mobile transfer options — sometimes with monthly withdrawal limits.
The real difference between student accounts and standard accounts involves fees and minimums: Student accounts are more likely to waive monthly fees, ATM fees and minimum balance requirements.
4. Certificate of deposit (CD)
Bankrate’s take: Locking in an interest rate can be great for guaranteed returns, but you need to know that you can safely put that money away for the given amount of time. Emergency funds and money you might need before the term is up aren’t a good fit for a CD.
What it is: A certificate of deposit (CD) is a type of savings account where you agree to leave your money with the bank for a set period in exchange for a fixed APY. CD terms range anywhere from one month to five years or longer. Early withdrawal from a CD comes with a penalty — from 90 days up 12 months of interest.
Current rates: As with high-yield savings accounts, online banks tend to offer the highest yields on CDs — and you’ll currently find rates of up to 4.50% APY. Meanwhile, large brick-and-mortar banks tend to pay rock-bottom rates as low as 0.01% APY.
Monthly fees: Usually $0.
Accessibility: A CD locks up your money for a set term, and accessing your money before the term expires typically results in an early withdrawal penalty that can eat into your interest and possibly even your principal. As such, a CD is best for money you can afford to leave untouched, rather than funds you’ll need for emergencies or living expenses.
Money tip: If you want CD rates without the lock-up period, look for no-penalty CDs. They typically pay 0.25%-0.50% less than traditional CDs but let you withdraw anytime after 7 days without penalty.
5. Money market account (MMA)
Bankrate’s take: If you need a hybrid account that allows you to save at a good rate and transact from the account, an MMA may be the way to go. Minimum balance requirements and fees may make a high-yield savings account more suitable if you don’t need to transact from it.
What it is: A money market account is similar to a savings account, though they often offer check-writing capabilities or a debit card for easier access to funds. Market money accounts tend to require higher minimum balances than other types of savings accounts, so consider the pros and cons of money market accounts before making a decision.
Current rates: The best money market accounts currently earn APYs up to 4% APY — similar to the top high-yield savings accounts. However, some money market accounts advertise high APYs but require high minimum balances (think $10,000, rather than $100) to earn those rates. Below that threshold, you might earn just 0.10% to 0.50% APY. Always check the balance tiers before opening.
Fees: Whether the money market account has a monthly maintenance fee depends on the issuing bank.
Accessibility: Unlike most savings accounts, money market accounts often offer access to your funds via a debit card or paper check. Note though that some banks may impose limits on monthly withdrawals, just like with a savings account.
6. Cash management account
Bankrate’s take: For those with $250,000 or more to deposit who already use brokerage accounts and need advanced FDIC coverage, a cash management account may be useful. A simpler experience and higher interest rates are available with high-yield savings accounts if you’re looking to deposit less than the maximum insured amount.
What it is: Cash management accounts are offered by non-bank financial institutions — brokerages like Fidelity, Schwab and Vanguard, or robo-advisors — and combine checking, savings and investment features in one account.
Your deposits are spread across multiple partner banks, extending FDIC coverage beyond the standard $250,000. You can write checks, use a debit card, and transfer money just like with a checking account.
Current rates: Between 3% and 4% APY (typically lower than high-yield savings accounts).
Fees: Usually $0.
Accessibility: Because this type of account is designed for everyday transactions, a cash management account is unlikely to have withdrawal limits.
FDIC insurance: Yes, but through partner banks. Coverage can exceed $250,000 if your deposits are spread across multiple banks (check with your account’s provider).
7. Health savings account (HSA)
Bankrate’s take: To open an HSA, you’ll need a high-deductible health plan. It can be a good way to let your money for medical expenses grow tax free. But these account types are for very specific costs until you reach age 65, so they’re not the place for liquid savings.
What it is: A tax-advantaged savings account for medical expenses, available only if you’re enrolled in a high-deductible health plan (HDHP). Contribution limits apply, but unspent funds roll over year after year. Because it’s restricted to healthcare spending and requires an HDHP, it’s not a fit for everyone.
An HSA’s real value is its triple tax advantage: contributions are pre-tax or tax-deductible, growth is tax-free and withdrawals for qualified medical expenses are tax-free. You can also invest the balance if your provider allows it, similar to a medical IRA. After age 65, you can withdraw funds for any purpose — you’ll just owe income tax, with no penalty.
Current rates: The APY on HSAs is usually lower than high-yield savings accounts, but one feature of HSAs is that you can also invest your funds in stocks, bonds, ETFs and other securities if your account allows it. If you elect to invest your money, the returns will follow that of your chosen investments.
Fees: Some HSAs do not charge a monthly fee, while others do. Some institutions also waive fees if the HSA is offered through an employer.
Accessibility: You can withdraw funds from your HSA at any time to pay for qualified medical expenses. If you withdraw funds for other purposes, that money is subject to a 20% penalty. This rule does not apply if you are disabled or over age 65.
8. Individual retirement accounts (IRAs and Roth IRAs)
Bankrate’s take: Long-term investments, IRAs and Roth IRAs are for growing retirement savings tax-free. Because of the nature of them, they’re not good for short-term savings or liquid savings needs — for those, a high-yield savings account would be better.
What they are: Tax-advantaged investment accounts for retirement savings, with annual contribution limits — $7,500 in 2026, or $8,600 if you’re 50 or older. The difference between account types is taxation: a Roth IRA is funded with after-tax dollars, and withdrawals are tax-free after age 59½. A traditional IRA is funded with pre-tax dollars and withdrawals are taxed as income after age 59½.
Rates: IRAs are investment accounts, not savings accounts. Returns depend on what you invest in — whether it’s stocks, bonds, mutual funds, CDs or the like.
Fees: Varies by custodian; typically from $0 to $50 annually for account maintenance, plus investment fees.
Accessibility: Plan to keep all contributions to your IRA or Roth in the account until you retire, or you turn 59½. If you withdraw funds from your traditional IRA early, they are subject to both income tax and a 10% penalty. However, you can withdraw your contributions from a Roth IRA at any time, but not the earnings.
Next steps
Find a high-yield savings account
Take a look at Bankrate's highest-rated (and highest-yielding) savings accounts
Check out the best CDs
See Bankrate's list of the best CD rates across varying terms
Compare MMA rates
Consider a money market account for a high rate and checking account features
Calculate your savings
Determine how much you’ll earn in interest based on your APY
Frequently asked questions about savings accounts
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