As per the savings account definition, it is a type of bank account where an individual can deposit their money and earn interest on it. These accounts are typically used for storing money that is not needed for immediate expenses and for saving money over the long term.
Savings accounts are considered low-risk because the funds deposited are insured by the Federal Deposit Insurance Corporation (FDIC) in the United States or by a similar institution in other countries. This means that if the bank fails, the government will reimburse account holders for up to a certain amount of money.
Savings accounts typically have lower interest rates than other investment options such as stocks, bonds, or mutual funds, but they offer a higher degree of security and liquidity. In general, individuals can withdraw their money from a savings account at any time without incurring penalties or fees, although some accounts may have restrictions on the number of withdrawals allowed per month.