Posted in Finance, Accounting and Economics Terms, Total Reads: 64
Definition: Savings Account
Savings account is a type of account, usually in a bank, where a person can deposit his/her money (i.e principal amount) and get an interest at a particular rate. It provides security to the money deposited by the individual.
Savings accounts allow customers to deposit a part of their liquid assets as well as earn a return. Savings accounts are used to deposit cash which isn’t used for daily expenses.The savings account can have a fixed number of time when transactions can be done without any costs.
The interest rates provided by the savings accounts are generally more than that provided in the checking account. But it is less than that provided in treasury bills and certificates of deposit. Hence savings accounts shouldn’t be used by a person for long term money investment. Liquidity provided by the savings account is another advantage provided. They are considered most liquid other than cash and demand accounts.