Investopedia.com defines a savings account as “a deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.” It is basically a bank account that earns interest. Savings accounts are considered one of the most liquid investments after cash and demand notes. Unlike a checking account, a savings account is generally not used for everyday expenses, although some do have check writing features. Most accounts offer a limited amount of transactions and transfers free of charge on a monthly basis.
