In deposit terminology, the term Savings Account refers to a bank account opened with a deposit of liquid funds and without having a given maturity date. Savings accounts usually have some restrictions on the number of withdrawals per statement period, and they tend to pay a relatively low rate of interest.
Difference between Savings Accounts and Checking Accounts
Although the terms of specific Savings Accounts can vary among financial institutions and countries, Savings Accounts tend to differ from checking accounts because they cannot usually be used as money by allowing the account holder to make a virtually unlimited number of withdrawals per statement cycle via check or debit card. For example, in the United States, only up to six withdrawals from a Savings Account can be made per statement cycle without incurring a penalty, although the number of deposits per cycle is generally not limited.
Which companies provide Savings Accounts?
Savings Accounts are provided by retail banks, savings and loan corporations and credit unions that are usually regulated within the country in which they operate. Savings Accounts are used by individuals and businesses around the world as a means of storing their liquid funds for future use.
How risky are Savings Accounts?
Substantial investment security is provided by Savings Accounts held with reputable and insured financial institutions, but as a result of this perceived lack of risk, they usually only offer a low nominal rate of return or interest to the holder on deposits. Higher returns on Savings Accounts can sometimes be obtained from online savings accounts, but the risks in doing so may be greater, especially if the financial institution taking the deposit is uninsured and/or poorly capitalized.
Who regulates and guarantees Savings Accounts?
In the United States, funds deposited in Savings Accounts are protected up to a certain amount by the Federal Deposit Insurance Corporation or FDIC when the deposit is made with a financial institution that is also an FDIC member.
For example, holders of Savings Accounts in the in the United States are permitted only up to six withdrawals per statement cycle without incurring a penalty. Nevertheless, the number of deposits per cycle into a Savings Account is generally not limited. Savings Accounts are provided by retail banks, savings and loan corporations and credit unions that are usually regulated within the country in which they operate. In the United States, Savings Account deposits with are protected up to a certain amount by the Federal Deposit Insurance Corporation or FDIC when made with FDIC member financial institutions.