A savings account is the most basic type of account at a bank or credit union, allowing you to deposit money, keep the funds safe, and withdraw funds as needed. Savings accounts typically pay interest on your deposits, which helps you grow your money, but rates are relatively low on these low-risk accounts. As you master your savings account, you’ll use other accounts for specific financial needs (like a checking account for payments and purchases). A Safe Place to Access Your Money A savings account holds your money in a safe place — your bank or credit union. Instead of carrying cash or keeping money in your home, you can put the funds into a savings account for safe keeping. Cash that’s outside of the bank can easily get stolen or damaged in a fire. But when the federal government insures your savings, you avoid the loss of losing money if your bank or credit union fails. Banks are covered by FDIC insurance Federally insured credit unions are covered by NCUSIF insurance (accounts at credit unions are often called "share" accounts) Savings accounts offer easy access to your cash (also known as liquidity, or the ability to make a withdrawal easily and quickly). Once you’re ready to spend money, you can withdraw cash or transfer funds to your checking account to pay by check, debit card, or an electronic funds transfer. You generally do not make those types of payments directly from your savings account — federal law limits the number of certain transfers out of savings each month.