Types of Savings Accounts

Ready to start your savings journey? In the realm of personal finance, few tools have stood the test of time like the savings account. A savings account is a traditional and widely recognized financial tool. It provides individuals a safe and accessible way to save money, earn interest and achieve their financial goals.

Despite the emergence of new and innovative savings vehicles, the savings account continues to help people build their wealth and manage their finances responsibly. In this article, we'll go over the main components of a savings account and look at the two main types of savings accounts. 

What are the benefits of savings accounts?

A savings account is a deposit account offered by a financial institution. It's a place where individuals can securely store their money while earning interest on their deposits. Its primary purpose is to facilitate building funds over time. It allows individuals to set aside money for future needs. These may include emergencies, short-term goals or long-term aspirations like a down payment on a house or retirement fund.

Savings accounts offer several key features and benefits that make them a preferred choice for many. These accounts are known for their safety, accessibility and flexibility. 

What are common types of savings accounts?

There are several types of savings accounts, each with its own perks and drawbacks. These include:

  • Traditional savings accounts
  • High-yield savings accounts
  • Money market accounts
  • Health savings accounts
  • Student savings accounts
  • Certificates of deposit
  • Cash management accounts
  • Specialty savings accounts

These differ in their cash management capabilities, typical annual percentage yields, and tax advantages. Let's take an in-depth look at the two most common types: traditional and high yield.


The general characteristics of a traditional savings account tend to include low to no fees, the ability to earn interest on deposited funds, easy access to the money, and Federal Deposit Insurance Corporation (FDIC) coverage for up to $250,000 per depositor, per insured bank, for each account ownership category. There may be minimum balance or deposit requirements, and interest rates may vary based on the amount deposited and prevailing market conditions.

High yield

High-yield savings accounts typically pay interest at a higher rate than traditional savings accounts, allowing for greater earning potential on deposited funds. They may also have minimum balance requirements and monthly limits on the number of withdrawals. These accounts are sometimes online-only, meaning they don't have physical branches at traditional banks. They may also offer additional features such as no monthly fees and easy transfers between accounts.

Traditional vs. High Yield: What's the Difference?

Interest rates

How much interest are you looking to earn?
Traditional savings accounts generally offer lower interest rates compared to high-yield savings accounts. The rates can vary but tend to be relatively modest. As the name suggests, high-yield savings accounts pay at higher, typically variable interest rates. These accounts aim to offer competitive interest rates that can help account holders grow their savings more quickly.

Account accessibility and convenience

What kind of access do you need to your account? How often do you plan to access it?
Traditional savings accounts provide easy access to funds through various channels. This may include in-person transactions at bank locations, ATMs, online banking and mobile apps. Some accounts may offer check-writing capabilities as well. They may also provide the ability to link the savings account to a checking account for easier transfers and overdraft protection.

Online banks often offer high-yield savings accounts and primarily offer online access to funds. Account holders can typically manage their accounts through online platforms and mobile apps and may have access to online transfers and ATM withdrawals. They often provide customer support through online or phone channels, too. 

Fees and minimum balance requirements

How much can you put into an initial deposit, and can you maintain a minimum balance?
Both types of accounts may have minimum balance requirements. This means a certain amount of money must be maintained in the account to avoid fees or enjoy certain benefits. Monthly maintenance fees may also apply if the minimum balance requirement isn't met. However, many accounts have no monthly maintenance fees or minimum balance requirements. It's essential to review the terms and conditions of each account, as fees can vary.

Financial institution type

How do you like to bank?
Brick-and-mortar banks typically offer traditional savings accounts. High-yield savings accounts are often offered by online banks or financial institutions that operate primarily through online platforms. They may not have physical locations, and customer service may be available only through digital channels.

What else to consider when choosing a savings account

Apart from the above considerations, there are several other factors to look at when deciding what type of savings account you should open and where.

  1. The overall financial stability of the bank or institution. When choosing between traditional and high-yield savings accounts, consider the financial stability and reputation of the bank or institution offering the account to ensure the safety of deposited funds

  2. Future goals and needs. Consider your long-term financial goals and needs. Evaluate whether a traditional savings account or a high-yield savings account aligns better with your goals, whether it's saving for short-term needs, building an emergency fund or achieving long-term financial milestones. You even may be a better match for other savings vehicles like an investment account

  1. Customer support. Evaluate the level of customer support provided by the financial institution. Consider factors such as mobile apps, availability, responsiveness, and the ability to get assistance when needed, whether through phone, chat or email

Savings accounts offered at TD Bank

TD Bank offers excellent options for people who want to take advantage of the benefits of a savings account.

TD Simple Savings

This account is ideal for building savings or if you have a young saver in the family. Here are some of the top features of the TD Simple Savings account:

  1. Drop the monthly maintenance fee. All it takes is a $25 recurring transfer from your linked TD Bank checking account to waive the fee for the first year. Then, just keep a $300 minimum balance to waive the $5 monthly fee

  2. It's free for young and senior savers. Enjoy no monthly maintenance fee and no minimum daily balance requirements if you're 18 or under or 62 or older

  1. Enjoy free automatic transfers. Kick-start your savings with transfers from other accounts

  2. Enroll in Savings Overdraft Protection. Automatically transfer cash from your linked savings account to cover an overdrawn checking balance

TD Signature Savings

This account is ideal if you plan to maintain a higher balance and want to maximize your earnings. Here are some of the key perks of the TD Signature Savings account:

  1. Experience no TD ATM Fees anywhere you go1. Pay no TD ATM fees when you use non-TD ATMs, regardless of balance. Get reimbursed for other banks' surcharges when you maintain a $2,500 minimum daily balance

  2. You have three ways to waive the monthly maintenance fee. Maintain a $10,000 minimum daily balance, link an eligible TD Checking account or open it as an IRA

  3. Enjoy tiered APY rates: As your balance grows, so does your interest rate—helping you to earn more as you save.

  1. Take advantage of free services. Incoming wire transfers, official bank checks, money orders, and stop payments are free.

  2. Take advantage of a relationship bump rate. This occurs when you link an eligible2 TD Bank active personal or small business checking, mortgage, home equity loan, or credit card.

  3. Enroll in Savings Overdraft Protection: Automatically transfer cash from your linked savings account to cover an overdrawn checking balance.

Take the first steps and start saving now

Are you ready to open a savings account and jump-start your financial future? Contact a TD Bank representative at 1-888-751-9000 or easily start an application online with a few clicks. If you're unsure which type of account is right for you, TD Bank offers a simple tool to help you decide based on your goals. You can also find a TD Bank location near you by visiting TD's Store Locator

Your TD account comes with more than just a great rate

  • Mobile Banking

    Bank anytime, anywhere—right from your phone with the TD Bank app.

  • TD Overdraft Relief3

    Overdrafts happen. When they do, TD Overdraft Relief gives you flexibility and options to avoid fees.

  • TD Checking Accounts

    Find an account that meets your needs – and has the perks you want.

  • Still deciding on a TD Savings Account?

    Use the account selector to discover which account is right for you.

This article is based on information available in June 2023. It is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available. For specific advice about your unique circumstances, consider talking with a qualified professional.

1For TD Signature Savings accounts, TD fees waived regardless of balance, and non-TD fees, which includes any surcharges at the time of your transaction, will be reimbursed when the minimum daily balance in the TD Signature Savings account is at least $2,500. The institution that owns the terminal (or the network) may assess a fee (surcharge) at the time of your transaction, including balance inquiries.

2TD Signature Savings: Enjoy a relationship bump rate when you link an eligible account, which includes a TD Bank personal mortgage, home equity or credit card OR an active personal or small business checking account WITH at least three Customer-initiated deposit, withdrawal, transfer or payment transactions posted each calendar month OR an active personal or small business checking account WITH a direct deposit each calendar month. See the Personal Deposit Account Agreement for more details.

3Overdraft Services do not apply to TD Essential Banking Accounts. We may decline or return transactions that would result in an overdraft. Transactions that you make may cause your Account to overdraw but we will not assess your TD Essential Banking Account an overdraft fee or return item fee. For example, preauthorized transactions and other transactions may post to your Account even when the available balance in your Account is not sufficient to pay the transaction.

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