TYPES OF SAVINGS ACCOUNTS
Financial institutions offer a variety of savings accounts, each of which pays a different interest rate. Below is a description of the different types of savings accounts.
Savings Accounts (in general)
- Access your money at any time
- Earn interest
- Move money easily from one account to another
- Have your savings insured by the FDIC up to $250,000
Money Market Savings Accounts
- Earn interest
- Pay no fees if you maintain a minimum balance
- May offer check-writing services
- Have your savings insured by the FDIC up to $250,000
Certificates of Deposit
- Earn interest during the term (3 months, 6 months, etc.)
- Must leave the deposit in the account for the entire term to avoid an early-withdrawal penalty
- Receive the principal and interest at the end of the term
- Have your savings insured by the FDIC up to $250,000
New Deposit Insurance Limits—The standard insurance amount of $250,000 per depositor is in effect through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except IRAs and other certain retirement accounts, which will remain at $250,000 per depositor.
Source: Federal Deposit Insurance Corporation