Savings Account

A savings account is a type of account that is specifically designed to encourage saving. As banks use the money deposited by their customers to make loans to other people, savings accounts generally attract a high rate of interest on the current balance in return for allowing the bank to use this money for loans.

A savings account normally allows the holder to make deposits and withdrawals (sometimes a limited number), although does not enable users to access their money with checks. However, many financial institutions allow savings account holders to make deposits and withdraw funds through ATM.

The account provides an incentive for holders to save money by paying interest at a rate higher than that of a checking account. Some savings accounts charge a fee if your balance falls below a specified minimum. In some cases, savings accounts have a monthly or quarterly statement detailing transactions, while others have a passbook, in which transactions are logged in a small booklet that you keep.