What Is a Savings Account? Your Guide to Saving More

Manage Your Money

Learn what a savings account is and how it works. Discover how Broadview can help you grow your money smarter. Open your account today!

A savings account is a secure, interest-earning deposit account designed to hold money you don't need for daily spending. You deposit funds, the account earns interest over time, and you can withdraw when the time is right.

Think of it this way: a checking account is built for everyday spending. A savings account is built for everything else. Your money stays accessible, but it's set apart with a clear purpose.

Member tip: Broadview's Primary Savings account requires $1 to open and supports scheduled automatic transfers.

What Is a Savings Account Interest Rate?

Interest on a savings account is often expressed as APY, or annual percentage yield. APY accounts for compounding, meaning you earn interest on your balance and on the interest already credited. A higher APY generally means your money grows a bit faster over time.

At Broadview, this return is called a dividend rather than interest, but the effect is the same: your balance grows while your money sits safely in the account. Build Your Savings includes options such as high-yield savings with tiered dividend rates, so members at higher balances may earn more on every dollar saved.

Good to know: APY reflects compounding and is typically a more useful comparison point than a stated interest rate alone.

Types of Savings Accounts

Not all savings accounts work the same way, and that's actually useful. Different account types are designed for different goals.

Standard savings: A straightforward place to keep money safe and earning dividends.
Money market accounts: Often carry tiered rates and may offer limited check-writing access.
Holiday club accounts: Designed to help you save throughout the year for seasonal spending.
Health savings accounts (HSAs): Paired with high-deductible health plans to cover qualified medical costs.
Certificates of deposit: Fixed rates for set terms, offering predictable growth in exchange for keeping funds in place.
IRAs: Tax-advantaged accounts built for retirement saving.

Tax treatment varies by account type. A qualified tax professional can help you decide which option fits your situation.

Savings Account Advantages and Disadvantages

Pros

Earns interest or dividends over time
Federally insured by the NCUA for added security
Goal-based account options may be available
Funds remain accessible when you need them

Cons

Returns are typically lower than long-term investments
Some accounts apply balance tiers that affect your rate

Saving with Broadview

Broadview's members are also part owners. Rather than returning profits to outside shareholders, we return value to members through competitive rates, low fees, and expanded services.

Managing your accounts on your schedule is easy with Digital Banking, available 24/7 through our mobile app on the Apple App Store and Google Play.

Member benefit: Build Your Savings accounts are federally insured by the NCUA up to applicable limits. Mobile banking is available for 24/7 access and account management.

If you're ready to put your money to work, explore Certificate options that lock in a fixed rate for a set term, giving you predictable, steady growth.

Explore Build Your Savings

Frequently Asked Questions

What is a savings account and how does it work?

A savings account is a secure place to keep money you don't need for everyday spending, while it earns interest. You simply deposit funds, and over time, your money grows thanks to the interest it earns. You can easily access your funds whenever you need them.

How does money grow in a savings account?

Your money grows in a savings account by earning interest, which is often shown as an Annual Percentage Yield (APY). APY includes the effect of compounding, meaning you earn interest not only on your initial deposit but also on the interest you've already accumulated. Generally, a higher APY helps your balance grow faster.

Can I take money out of my savings account?

Yes, absolutely. Savings accounts are designed to keep your money accessible for when you need it. You can withdraw funds from your savings account whenever you choose.

What is the difference between a savings account and a checking account?

The main difference lies in their purpose. A checking account is built for frequent daily transactions like paying bills or making purchases. In contrast, a savings account is specifically designed for holding money you want to save and grow over time, while still keeping it accessible.

Is opening a savings account a good idea?

Yes, it's a wonderful idea for many people! Savings accounts offer a secure way to hold your funds, earn interest, and work towards your financial goals. Plus, your funds are federally insured by the NCUA, providing peace of mind.

^{Last reviewed: April 2, 2026 by the Broadview Team}