 TITLE: What’s the Difference Between Money Market Accounts, CDs and Savings Accounts? CONTENT: A savings account at a bank, credit union or other financial institution gives you a place to park money you plan to use for short-term needs, such as paying for a wedding or making a car down payment, or establishing an emergency fund you can access easily.\nMoney deposited in a traditional savings account earns interest, but not much. As of January 2021, the average interest rate (known as annual percentage yield, or APY) for a U.S. savings account was only 0.05% for a balance below $100,000, according to the Federal Deposit Insurance Corp. (FDIC). A yield of 0.05% would earn you just $2.50 per year on a $5,000 balance.\nA high-yield savings account, often provided by online banks, can deliver an APY that's higher than a traditional savings account. But if you open a high-yield savings account at an online bank, be sure you're comfortable with the possibility that you may lack easy access to branches or ATMs.\nThe FDIC insures savings up to $250,000 per account holder at federally insured banks. If a bank fails and your savings account has less than $250,000 in it, the FDIC guarantees your money will be protected. If the savings account is at a credit union, the National Credit Union Administration (NCUA) insures the money under the same guidelines.\nKeep in mind that a savings account is restricted to six withdrawals per month—a limit not imposed on checking accounts. If you exceed the six-withdrawal threshold, your savings account may be switched to a checking account. After the coronavirus outbreak was declared a pandemic in March 2020, the Federal Reserve temporarily suspended the six-withdrawals-per-month limit. END