Whether you're putting money aside for something big like a down payment on a house, you want to ensure you're prepared in the event of an unexpected emergency, or you’re saving to become a millionaire, savings accounts are useful tools and safe places to store your hard-earned money.
The idea of a savings account is simple and straight-forward, right? Money goes into your account, you might earn some interest, and then eventually that money comes out again. This sounds easy, but with so many options to choose from, how do you find the savings account that suits your goals?
Thankfully, the process of choosing a savings account to help you reach your financial goals is simpler than you may think! Let’s explore some of the most common FDIC-insured savings accounts to determine which one is best for your needs.
Traditional Savings Accounts
One of the most common savings accounts is also the simplest and, you could say, effortless. Most traditional or "regular" savings accounts pay nominal monthly interest, and you may find accounts with no fees or minimum balance requirements if you shop around. Start earning interest with as little as $1 with our Statement Savings Account.
High-Yield Savings Accounts
As the name suggests, high-yield savings accounts tend to earn a higher interest rate – however, there's typically a monthly service fee that comes along with it. You may be able to get that fee waived or even partially waived as long as you maintain a higher balance.
High-yield savings accounts are ideal for people able to maintain a higher balance, who want to earn interest at a competitive rate, and want unrestricted access to their money.
Young Savers Accounts
It’s never too early to get a jump-start on smart saving habits! These exclusive accounts are intended to help kids and young adults learn money management skills and some accounts are designed to earn interest, and may come with other perks. We offer a special account for youth savers that earns interest on as little as $1. Plus, we’ll match your young savers initial deposit up to $10 when you open an account.* Keep in mind, age ranges for eligibility will vary depending on the financial institution.
Money Market Accounts
Money market accounts typically pay a higher interest rate than traditional deposit accounts. Some financial institutions require a sizable deposit to open a money market account and may waive the monthly service charge if you maintain an average monthly balance. There may be restrictions that limit the total number of transactions you can make during a specified time frame so the account is best suited for low activity levels. Learn more about one of our money market accounts to see if it makes sense for you.
Certificates of Deposit
Finally, we arrive at the concept of Certificates of Deposit, also known as, CDs. A CD is an FDIC-insured account that holds a fixed amount of money for a fixed period of time, otherwise known as the term. Terms can range from six months, one year, or five years, and vary by institution. Longer terms tend to pay higher yields.
Of all savings accounts, CDs earn the most competitive (and fixed) interest rate and is a great option if you don’t need access to your money until the end of the agreed-upon term. It is important to note, there are penalties for withdrawing your money early.
Consider your short and long-term goals to decide how much you need to save to reach them and then select a savings account to help you get there. Remember, by using a combination of accounts, you can maximize interest earned while keeping an eye on fund accessibility. Ready to open a savings account today? If not, the experts at Lakeland Bank are here to help you determine which account is best for you to use so you can crush those goals in no time.
*Offer available for new accounts only, limited to one account per youth. Initial opening deposit of $1 is required. Federal Regulations limit the number of transactions on this account. Deposit match credited to account within 45 days of opening.