Everyday Banking 101: Savings Accounts

Jersey Shore State Bank

by Jersey Shore State Bank

Piggy Bank


A savings account is a deposit account that allows a consumer to store cash securely. Savings accounts almost always allow the account holder to earn interest on the money they deposit. What separates them from investment accounts is that savings accounts are federally insured.


Having a savings account allows a consumer to distinguish between everyday spending money and cash that is meant for a rainy day or for future spending (i.e. vacation, college, etc.).

This article will break down the intricacies of savings accounts, how they work, and why they are good options for you and your financial portfolio.


Savings accounts are like a garden for your money – they can help it grow. When you deposit money with a bank, you are effectively giving them equity with which they can offer loans to you and other customers. The interest you earn on your savings account is sort of like a “thank you” from the bank for investing your money in them.

You will hear the phrase, “a little interest” thrown around when discussing deposit accounts that accrue interest. It’s probably the truest statement you will hear in banking. Most savings accounts don’t offer more than a 1% interest return on funds deposited. However, the upside to a low-interest savings account is that they require a very low balance to qualify for an interest return and they have very loose rules regarding the withdrawal of funds.

Savings accounts encourage you to build a “nest egg” that you do not need right away. Putting away money into a separate account can ensure that you have money when you DO need it. However, while it does encourage saving, it is not as easily accessible as money put into a checking account. Most institutions do not allow for point of sale purchases to be made through a debit card using funds in the savings account and some don’t allow hooking a savings account to a debit card at all.

The number of transfers or withdrawals from a savings account is dictated by federal law – the current number of allowable transfers and withdrawals is six per month. Taking money out through a teller or ATM doesn’t count towards that six-per-month limit. However unappealing that sounds, keep in mind the point of a savings account is to keep money aside which you DON’T touch until absolutely necessary or plausible.


Not interested in a simple savings account? Maybe you have a nice sized nest-egg saved up that you’d like to give even more “legs?” There are other savings vehicles for consumers to choose from as well. Here are two for example:

Money Market Accounts – These accounts often require a higher minimum balance in return for a slightly higher rate of return. This account is often treated as a hybrid checking/investment/savings account as it frequently comes with a debit card, but is limited to the number of monthly transactions one can conduct through it.

Certificate of Deposit (CD) – These accounts are a more restricted savings/investment account with a fixed term that ranges anywhere from a few months to a few years. While the term at which your money is off-limits is much more restrictive, these accounts often yield the highest APY of any deposit account. Typically, the longer a consumer commits to a CD, the higher the interest rate.

Where to find the best savings accounts? If a basic savings account serves you best and you’re just trying to establish a sum of money that you can declare your “nest egg” or you’re looking for something to maximize your money’s potential, then start researching your options. JSSB has a flexible selection of savings options for you. Pair these accounts with our Internet Banking feature and keep track of your savings daily.

Disclaimer: You should not place undue reliance on any forward-looking statements.  These statements speak only as of the date of this blog article, even if subsequently made available by the Jersey Shore State Bank on its website or otherwise.  Jersey Shore State Bank undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this blog article.

Jersey Shore State Bank

Jersey Shore State Bank

Jersey Shore State Bank operates fifteen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, and Union Counties. Since 1934, JSSB has been proud to service all of the banking needs of the communities within its serviceable region.