When it comes to savings accounts, you’ve got lots of options. And depending on your financial goals, such as saving up for a vacation or setting aside money for a rainy day, those options vary.
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Here are five different types of savings accounts and who they are best suited for.
1. High-Yield Savings Accounts
High-yield savings accounts (HYSAs) pay you a higher-than-average annual percentage yield (APY) while also allowing you to withdraw your money whenever you like.
This gives you the most bang for your (literal) buck when it comes to liquidity and interest-earning potential.
For example, the SoFi Checking and Savings Account earns up to 3.30% APY (plus a boost of 0.70% APY on new accounts for six months; terms apply).* Even without the boost, this is much higher than the national average of 0.38% on regular savings accounts!
Pros and cons of HYSAs
| Pros | Cons |
|---|---|
| High interest rates: HYSAs offer higher interest rates than other savings products. | Rates can change: Variable rates on HYSAs fluctuate depending on the market. |
| Low risk: HYSAs are insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). | Harder to access: The highest-rate HYSAs are mainly offered by online banks. You may not have an in-person bank or easy access to in-network ATMs. |
| Low/now fees: HYSAs are usually free and typically don't have minimum balance requirements. | Possible withdrawal limitations: Some banks may limit you to a certain number of transactions. |
Best suited for
Honestly, everyone can benefit from a HYSA. They are a great place to park your emergency fund or even earn interest on your shorter-term savings goals.
COMPARE: Best High-Yield Savings Accounts
2. Money Market Accounts
Money market accounts (MMAs) are checking accounts that function similarly to savings accounts. But because they are checking account products, they may offer a debit card and check-writing capabilities.
However, they offer higher rates, usually following a tiered-rate structure (meaning the more you deposit, the more you earn).
Pros and cons of MMAs
| Pros | Cons |
|---|---|
| Good interest rates: MMAs offer better rates than typical checking accounts. | Lower rates than other products: HYSAs or CDs may offer higher rates. |
| Accounts are insured: MMAs are eligible for FDIC/NCUA insurance. | Minimum balance requirements: In most cases, banks require higher balances to open the account, earn interest, and avoid fees. |
| Easier access: MMAs have debit cards or checks, for easier access to your funds. | Limited transactions: Typically, MMAs limit transfers or withdrawals to six per month, and may exclude electronic transfers depending on the institution. |
Best suited for
MMAs are best if you have a lot of money to take advantage of the top-tier rates (and meet the balance requirements), but also want the ability to occasionally write checks for large purchases.
READ MORE: Money Market vs. Savings: Which Account Is Best for You?
3. Certificates of Deposits
Certificates of deposit (CDs) are term-based deposit accounts that pay a fixed interest rate. CD rates are typically higher than rates you will get on savings accounts.
Pros and cons of CDs
| Pros | Cons |
|---|---|
| High rates: CDs have among the highest rates when compared to other savings accounts and MMAs. | Interest rate risk: If market interest rates are rising, you may be locked into a CD earning a lower rate. |
| Returns are guaranteed: Rates are fixed, and you're guaranteed interest payments for the CD's term. | Early withdrawal penalties: If you access your funds before the term ends, you'll likely have to pay a penalty or forfeit some interest. |
| Safe/low risk: CDs are insured through the FDIC/NCUA. | Limited liquidity: CDs are less liquid than HYSAs and MMAs, making it harder to access the money if you need it. |
Best suited for
If you already have an established emergency fund and are looking for a different savings product for your extra cash, CDs could be for you.
Additionally, if you are interested in a more old-school savings strategy, try your hand at building a CD ladder.
READ MORE: Are CDs Worth It?
4. Cash Management Accounts
CMAs are a special account that combines features of checking, savings, and investment accounts. They are non-bank products and are offered by brokerage firms or robo-advisors, such as Webull.
CMAs offer the blend of liquidity and accessibility of a checking account, while also providing better interest rates than savings accounts with integrated investment services.
Pros and cons of cash management accounts
| Pros | Cons |
|---|---|
| High interest rates: CMAs have higher interest rates than standard bank accounts. | Fees and minimum balances: CMAs likely have fees or balance thresholds. |
| Federally insured: These accounts use third-party banking partners, giving you FDIC insurance. | Limited to online-only: CMAs are predominantly offered by online-only brokerages and robo-advisors, with no in-person service. |
Best suited for
If you have a lot of cash on hand — specifically, more than the $250,000 FDIC insurability limit — you can benefit from a cash management account.
5. Custodial Savings Accounts
Custodial savings accounts are great for jump-starting your child's future.
These accounts can be opened at a bank or brokerage and are opened in the minor's name with the parent/guardian controlling the funds until the child is an adult.
Pros and cons of custodial savings accounts
| Pros | Cons |
|---|---|
| Control/flexibility: The parent controls the funds until the child is of age, making sure they are used appropriately. Anyone can also contribute to the account, not just a parent/guardian. | Potential impacts on student financial aid: Because the funds belong to the child, it can hurt their financial aid eligibility for college. |
| Learning: Provides an opportunity to teach your child about saving and financial responsibility. | Limited investment options: Some accounts may offer fewer investment choices. |
Best suited for
Parents who are trying to save for their child’s future.
FAQs
What is the best type of savings account?
High-yield savings accounts offer an APY that is higher than other savings accounts, while also giving you unrestricted access to your funds. This makes them very popular.
How many savings accounts should I have?
You should shoot to have at least one emergency account comprising three to six months of expenses. Beyond that, you can also open individual sinking funds depending on your goals.
TL;DR: Which Savings Accounts Should I Have?
You have many savings options.
If you want to earn the most interest, look into HYSAs, MMAs, or CDs. If you need a unique blend of product types offering you more deposit insurance, look into CMAs.
Lastly, custodial accounts can be used to jumpstart your child’s savings goals.
For more advice on how to best manage your finances, check out these episodes of the Erika Taught Me podcast:
- How To Budget For Beginners
- The 7 Baby Steps You NEED To Get To Financial Freedom
- 10 Steps Towards Financial Wholeness
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* Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
* Earn up to 4.00% Annual Percentage Yield (APY) on SoFi Savings with a 0.70% APY Boost (added to the 3.30% APY as of 12/23/25) for up to 6 months. Open a new SoFi Checking and Savings account and pay the $10 SoFi Plus subscription every 30 days OR receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 3/30/26. Rates variable, subject to change. Terms apply at sofi.com/banking#2. SoFi Bank, N.A. Member FDIC.
