Savings Accounts


Savings accounts are accounts maintained by commercial banks, savings and loan associations, credit unions and mutual savings banks that pay interest but do not allow the money to be used directly.

Savings accounts will enable you to set aside a portion of your liquid assets that could be used to make purchases while earning a monetary return.

What are the features of Savings Accounts?

Well, accessing funds held in a savings account might not be as convenient as from a checking account. Say, for example, you might have to visit an ATM or the bank instead of writing a check or using a debit card. But savings accounts are often known as ‘near money’ as money can be transferred easily through them.

All savings accounts offer itemized lists of all financial transactions, traditionally through a passbook and also through a bank statement. Some savings accounts require funds to be kept on deposit for a minimum period of time, but most enable unlimited access to funds.

Are there regulations for Savings Accounts?

Under Regulation D, 12 CFR 204.2(d) (2) in the United States, the term ‘savings deposit’ includes a deposit or an account that meets the requirements of Sec. 204.2(d) (1). Under the terms of the deposit contract or by practice of the depository institution, the depositor is permitted or authorized to make up to six transfers or withdrawals per month or maintain a statement cycle of at least four weeks. The depository institution may authorize three transfers to be made by check, draft, debit card or similar order drawn by the depositor and payable to third parties.

Tell me about costs of Savings Accounts

Withdrawals from a savings account are occasionally costly and are sometimes much higher and more time-consuming than the same financial transaction a depositor would perform on a demand account. However, most savings accounts do not limit withdrawals. Violations of Regulation D often involve a service charge, or even a downgrade of the account to a checking account. With online accounts, the main penalty is the time required for the Automated Clearing House to transfer funds from the online account to a bank where it can be easily accessed. During the period between the funds being withdrawn from the online bank and transferred to the local bank, a depositor will not earn any interest.

What is a Health Savings Account?

A Health Savings Account is a savings or investment account aimed primarily for the purpose of meeting medical expenses.

How can I become eligible for Health Savings Account?

If you are covered under a qualifying high-deductible health plan and not covered by any other health plan, then you are eligible for Health Savings Account. Also, if you are not entitled to benefits under Medicare and are not a dependent on another person’s tax return, you qualify for it.