Types of Savings Accounts

What types of accounts should you save in? The type of account you should open for your savings depends on the type of financial goal you’re saving for, since different account types have different rules about how/when you can use the money, and how they are taxed. Pick the account type based on the type of financial goal.

A lot of people put their emergency funds in a savings or checking account, ideally at a bank with no ATM fees and lots of convenient ATMs. You never know when a short term disruption to your finances can happen, especially in these unprecedented times.


If your goals are long term, for instance, saving for retirement, you can save for retirement in tax-advantaged retirement accounts such as an IRA, 401(k), or 403(b). In general, the financial optimum is to “use up” all available tax-advantaged retirement account space before moving on to investing in taxable investment accounts.

For specialty savings accounts, consider 529 plans (education), Health Savings Accounts (for future medical expenses, if your health insurance plan qualifies you for one), or UGMA/UTMA accounts for children.


Author: Luke Peters