savings account

noun

Definition of savings account

: an account (as in a bank) on which interest is usually paid and from which withdrawals can be made usually only by presentation of a passbook or by written authorization on a prescribed form

Examples of savings account in a Sentence

She opened a savings account.
Recent Examples on the Web A month shy of his 18th birthday, Eric is working 20 hours a week, tucking $100 into his savings account each month for tuition. USA Today, "These Black teens are turning 18 in Tamir Rice’s America," 22 June 2020 Without full rent checks coming in, Lacy’s personal savings account has taken a hit. Abby Vesoulis, Time, "How Eviction Moratoriums Are Hurting Small Landlords—and Why That's Bad for the Future of Affordable Housing," 11 June 2020 Accessibility is provided by linking an online savings account to your existing checking account. Ken Tumin, CBS News, "Americans are hoarding their cash — here are the best places to put it," 5 June 2020 If my grandparents had deposited the cash in a savings account that only kept pace with inflation, each $100 bill would have been worth roughly $1,800 at the time of Mary Gurda’s death. John Gurda, Milwaukee Journal Sentinel, "The coronavirus pandemic, collapsing economy and civil unrest are frightening. Wisconsin has seen worse and recovered.," 4 June 2020 Aside from his legislative salary, Cera reported earning up to $999 on savings account interest from Softite Federal Credit Union and $50,000 to $99,999 on retirement income from the Ohio Public Employees Retirement System. cleveland, "Mike DeWine won’t comment on Donald Trump’s call for more force to combat protests: Capitol Letter," 2 June 2020 Moving forward, financial experts recommend setting aside 25% to 30% of your gross income in a high-interest savings account for your taxes. Octavia Ramirez, refinery29.com, "How To Get The Most Out Of Your Tax Return This Year," 28 May 2020 This is not like money in a savings account for this reason. The Washington Post, "Color of Money Chat Transcript: When can I expect to get my stimulus payment?," 7 May 2020 In the article, there are two more graphs on universal savings accounts and Medicare expansion. New York Times, "What’s Going On in This Graph? | Voters by Age Group," 5 Mar. 2020

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'savings account.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of savings account

1850, in the meaning defined above

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Time Traveler for savings account

Time Traveler

The first known use of savings account was in 1850

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Statistics for savings account

Last Updated

26 Jun 2020

Cite this Entry

“Savings account.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/savings%20account. Accessed 2 Jul. 2020.

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More Definitions for savings account

savings account

noun

Financial Definition of savings account

What It Is

A savings account is a low-risk, interest-bearing deposit with a bank or other financial institution.

How It Works

Technically, savings accounts are time deposits, meaning that a bank can require the account holder to give notice before withdrawing the funds or impose a penalty for withdrawal before a specified date. Banks do not generally exercise this right, but institutions restrict the number of transactions allowed in and out of a savings account per month. Also, they may charge fees that vary with the average balance in the account. Institutions do not usually provide checks for savings accounts.

The interest rates on savings accounts vary by institution but are generally lower than interest rates on longer-term deposits, such as CDs or money market accounts. Interest is usually compounded monthly.

It is important to note that the interest rate paid on a savings account may be below the inflation rate, meaning that the account actually might lose purchasing power over time despite the interest earned.

Aside from the traditional savings account described here, the United States and other countries allow certain people to open special savings accounts, such as Health Savings Accounts or Coverdell Education Savings Accounts. Investors use these unique savings accounts to pay for specific items and they have special rules and tax implications.

Why It Matters

Savings accounts are conservative, low-risk investments because the Federal Depository Insurance Corporation typically insures the accounts (up to a limit) and account owners can access their funds easily. For these reasons, the interest rate on savings accounts tends to be lower than riskier or longer-term investments such as CDs, mutual funds, or corporate bonds.

Source: Investing Answers

savings account

noun

English Language Learners Definition of savings account

: a bank account in which people keep money that they want to save

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More from Merriam-Webster on savings account

Thesaurus: All synonyms and antonyms for savings account

Rhyming Dictionary: Words that rhyme with savings account

Spanish Central: Translation of savings account

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