Significance

• A savings account can be very beneficial. It allows you to keep your money safe from being spent while gaining interest. These accounts can prevent the need for spending budgeted funds.
  
  

Function

• A savings account works by placing your money in a secondary account. Depending on the bank, the account can be given an interest percentage and gain additional money. These accounts can also be used as a link for your checking account in the event of an overdraft.
  
  

Types

• There are three common types of savings accounts: generic savings, certificate of deposit and money market fund. A certificate of deposit "locks" your money from being touched for several months in exchange for added interest. Money market funds are investment funds that allow for money to be invested on your behalf.
  
  

Benefits

• A savings account can be a great way to save up money for other things. These accounts can provide a means for doing home improvement, sending a child to college or taking a vacation. A well-managed account can also build a relationship with your bank and help when getting loans or mortgages.
  
  

Warning

• Savings accounts need to be maintained like any other account. It is important to check these accounts frequently for interest changes, charges and other fees. If your account dips below a certain amount, the bank may assess fees.