The Alternative Savings Accounts

Because of the typically low interest rates that come with passbook accounts, some people just consider them a safe place to store money, and not really money earning investments. There are actually many types of savings accounts to choose from, each with different pros and cons. While all saving accounts are considered conservative investments, you can earn quite a bit if play it smart:

Passbook Accounts - These are "plain vanilla" saving accounts. You are given a ledger called a passbook, and in it, all your deposits, withdrawals and interest are recorded. There is typically no minimum balance, no fees, and you can withdraw and deposit as often as you want. Passbook accounts are FDIC insured for up to $100,000.

Money Market Accounts - Compared to passbook accounts, money market accounts require a minimum balance, earn better interest, and can usually come with a limited number of withdrawals in a month.

Health Saving Accounts (HSAs) - Intended for use during medical emergencies, the main feature of the HSA is that the money you put into it is up to $5,000 a year is tax deductible. The money will only remain tax deductible if it is withdrawn for medical expenses. HSAs are offered to compliment High Deductible Health Plans.

High-Yield Saving Accounts - These are accounts that are sort of a marriage between passbook accounts and certified deposits (CDs). A large minimum balance is required, interest is high, but withdrawals are allowed with restrictions in amount and frequency, no fees are charged provided withdrawals are kept within agreed limits.

Retirement Saving Accounts - Accounts specifically designed for retirement, there are IRAs, 401(k) plans, and Roth IRAs. All accounts come with some form of tax break, but on condition that withdrawals can't be made before a certain age.

Foreign Currency Savings Accounts - In these uncertain times, the strength of the Dollar is not what is used to be. If you're looking not just to save money, but to protect your money from currency fluctuations, it might be best to keep it in a foreign currency that is more stable. These are typically available from multi-national banks.

These are actually just a few of the available options. There are a lot of saving accounts out there we haven't mentioned, banks do try to mix it up to cater to different needs. If you shop around, you'll find one that suits your needs best.