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Comparing Savings Options

April 03, 2023

Everyone should save for short and long-term goals, but knowing which savings option is right for you can be confusing. Explore features and functions of each to determine if a traditional savings account, certificate of deposit (CD)/share certificate or a money market account is best based on your unique savings goals and needs.

28% of adults don’t have savings set aside for emergencies.


Savings Goals

  • Monthly savings: 5-10% of your monthly income
  • Rainy-day/emergency fund: Minimum $1K
  • Mid-range savings: At least 6 months of budgeted expenses

Types of Savings Accounts


  • Minimal initial deposit requirements
  • Easily transfer money to and from to pay bills or balance accounts
  • Some come with an ATM card for convenience


  • Designated for specific goals and needs
  • Examples include Youth Savings, Health Savings, Education Savings, Holiday/Vacation Savings, Wedding, Home Down payment Savings and more
  • Sometimes have conditions for how and when you can access funds
  • Features vary depending on type of account


  • Require a larger initial deposit
  • Usually have higher interest rates than regular savings accounts
  • May limit the number of transactions per statement cycle
  • Often offer tiered structures, so the more you save, the more you earn
  • Easily access account funds for transfers and transactions
  • Can write checks against the balance


  • Receive higher interest rates than savings or money market accounts
  • Purchased for a specific term (e.g., 6 months, 12 months, 18 months)
  • Fixed interest rate based on the term
  • Can’t deposit additional money until term maturity
  • Early withdrawal penalty

55% of adults that have a savings account have more than one.

  Standard Savings Account High-Yield Savings Account Specialty Savings Account Money Fund Account CD/Share Certificate
Overview Earns interest and offers quick access to funds Earns higher interest than standard savings (often available through online- only institutions Tailored to specific savings goals and needs, like a vacation or holiday gifts Typically earns more interest than regular savings but has higher balance requirements Usually has highest interest rate but has most limited access to funds
Insured Yes Yes Yes Yes Yes
Type of Rate Variable Variable Variable Variable Fixed
Easy to withdraw/transfer money Yes Yes, but often not immediate Depends on type Yes, but with limits No
Good as emergency fund Yes Yes Maybe Maybe Yes
Good for day-to-day savings Yes Yes No Yes No
Good for youth savings Yes Yes Maybe Maybe Yes
Good for vacation savings in 3 months Yes Yes Yes Maybe No
Larger purchase in 6 months Yes Yes Yes Yes Maybe
College tuition next year No Yes Yes Yes Maybe
Future down payment No No Maybe Yes Yes
Gift money for a family member Maybe Maybe Maybe Yes Maybe

39% of Americans don't have enough money on hand to cover a $400 emergency.


Average Savings Account Balances By Income



Federal Reserve, Motley Fool

by Middlesex Savings Bank