A bank account for storing money with interest, FDIC-insured and easily accessible.
A savings account is a bank account designed to hold money safely while earning interest. Savings accounts are FDIC-insured up to $250,000, making them extremely safe. Interest rates vary: traditional brick-and-mortar banks offer rates as low as 0.01% APY, while online banks offer "high-yield" rates of 4–5% APY. Savings accounts offer liquidity (easy access to funds) and stability (no market risk), making them ideal for emergency funds and short-term savings goals. The tradeoff: interest rates are lower than expected stock market returns (historically ~10% annually). For long-term investing (10+ years), stocks are appropriate; for money needed within 5 years, savings accounts and CDs are safer.