People walking past an HSBC Bank
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Bank accounts allow you to save and easily keep track of your money. Some will even earn you more money, in the form of interest. And unlike the cash you keep in your wallet, money held in bank accounts is secure at all times.

If you’re interested in opening an account, however, you’ll have to decide among several different kinds. Here is a look at different types of bank accounts to help you choose the one that best fits your needs and circumstances.

Bank account basics: checking and savings

The two most popular types of bank accounts are checking accounts and savings accounts. Each functions differently and serves a different purpose.

  • Checking accounts are the most accessible type of bank account, allowing you to deposit and withdraw money as often as you want. Most checking accounts come with debit cards, which you can use to make purchases and withdraw money from ATMs, as well as paper checks. In addition, most allow you to pay bills electronically. Only some checking accounts earn interest, and many charge fees for maintenance, ATM withdrawals and minimum balance violations. Comparing options can help you find a checking account with the lowest fees and best terms for your situation.
  • Savings accounts allow you earn interest on your deposits, and are good tools for emergency funds or for keeping money you otherwise don’t want to spend right away. They don’t come with debit cards, and there is usually a limit to the number of withdrawals you can make per month. Savings accounts differ in interest rates, method of compounding interest, service fees and minimum opening deposits, so search for the one that’s right for the amount of money you plan to save and how you intend to use the account.

Other types of bank accounts: money market accounts and CDs

While savings and checking accounts meet many financial needs, other types of bank accounts have their own advantages. Here are two more types to consider:

  • Money market accounts earn more interest than savings accounts, but they require a higher minimum balance, usually between $5,000 and $10,000. Additionally, there is no fixed interest rate for money market accounts: Instead, the interest rate varies based on money markets. Some offer the option of checks, but there is often a minimum check amount and a limit to the number of checks you can write each month. The number of withdrawals allowed is also limited.
  • CDs are short for certificates of deposit. They earn interest at a higher rate than money market or savings accounts, but the money is not accessible to you for a set amount of time—typically between a few months to a few years. Like money market accounts, they require a minimum initial deposit. CDs are excellent tools for saving money, but only if you’re sure you won’t need access to the money until the end of the CD’s term. If you’re forced to withdraw before the time is up, you’ll pay a stiff penalty.

Mix accounts to meet various needs

When choosing the type of bank account that’s right for you, remember that you can open more than one to meet your various needs. To open an account, visit the websites of local banks and read about their options. Then make an appointment at the bank or fill out an online application.