Comparing Savings Accounts: Which One Fits Your Goals?

A penny saved is a penny earned. But with the right savings account, that penny can actually grow into more pennies. (It works even better if you save more than just pennies.)

But there are different types of savings accounts — which one is best for you?

Savings Accounts

The basic premise of a savings account is that it's one you use less often than your checking account. When you withdraw cash from an ATM, use your debit card or schedule automatic recurring payments (like for your phone bill), you’re probably using your checking account. These accounts typically don’t accrue much, if any, interest, so it doesn’t make sense to keep a large balance in them. 

 Savings accounts can allow that money to grow. However, banks don’t want you to use them as often, so savings accounts often come with limited withdrawals and minimum balance or deposit requirements. 

Savings Accounts Options¹

Let’s look at some different types of savings accounts.

Personal Savings Accounts

This is a traditional savings vehicle that can help you meet your short-term financial goals or store your emergency funds. These accounts typically have low minimum balance requirements and small fees that the bank may waive if you maintain a higher balance. Personal savings accounts usually offer a variable interest rate and a limited number of withdrawals.

Money Market

A money market account combines the features of savings and checking accounts, offering a tiered, variable interest rate. Such accounts may even allow for check-writing and ‌provide better access than a standard savings account. And sometimes the interest rate is even higher than a standard personal savings account, though the minimum balance and/or fees may be higher. 

 IRA Money Market

This is a flexible individual retirement account (IRA) that allows tax-advantaged retirement savings with easy access to funds. With an IRA money market account, you can make additional deposits at any time. However, withdrawals you make before a certain age may be subject to federal taxes and penalties².

 Young Savers

These accounts help young people (25 or younger) build good savings habits. They typically require very low minimum balances and no fees. These accounts automatically convert to a standard personal savings account on the primary owner's 26th birthday³.

Certificates of Deposit (CD)

These offer a low-risk investment for funds you don’t need for a set period (such as five to seven years), maximizing earnings through a guaranteed fixed rate. Certificates of Deposit often require a four-figure initial deposit, and there are penalties for early withdrawal before the CD reaches its maturity date.

IRA CD

This is a retirement savings vehicle that secures a guaranteed, fixed interest rate for a specific term within a tax-advantaged IRA. It’s effectively a CD you don’t intend to withdraw from until retirement². 

Which One’s Best for You?

Know which savings account you want to open? Or do you want to talk about your options? Either way, we’re here for you. Contact a Vectra Bank professional and discover how we can make your savings grow. 

 

^{1Please refer to the Deposit Account Agreement, Account Disclosure, Deposit Rate Sheet and Personal Account Schedule of Fees, or speak with a banker for more details.}

^{2IRA account must be single owner. Annual contribution limits may apply. Please consult your tax professional for information regarding tax deductibility, required distributions, and before making withdrawals.  Withdrawals made from an IRA product before age 59 1/2 may be subject to Federal taxes and penalties.}

^{3The Young Savers account will automatically convert to a Amegy Bank Savings account on the primary account holders 26th birthday and afterwards may be subject to a Monthly Service Fee unless the daily account balance remains above $200 during the statement month. The primary account holder must be 25 years old or younger for the monthly service fee to be waived. This benefit does not extend to secondary account holders. This benefit will terminate at the end of the statement cycle in which the primary account holder turns 26 years old.}