Savings accounts are accounts maintained by retail financial institutions that pay interest but can not be used directly as money (by, for example, writing a cheque). These accounts let customers set aside a portion of their liquid assets while earning a monetary return.

Features

Savings accounts are offered by commercial banks, savings and loan associations, credit unions, building societies and mutual savings banks.

Obtaining funds held in a savings account may not be as convenient as from a demand account. For example, one may need to visit an ATM or bank branch, instead of writing a cheque or using a debit card. However, this transference is easy enough that savings accounts are often termed "near money".

Some savings accounts require funds to be kept on deposit for a minimum length of time, but most permit unlimited access to funds. In the US, Regulation D, 12 CFR 204.2(d)(2)] limits the withdrawals, payments, and transfers that a savings account may perform. Banks comply with these regulations differently; some will immediately prevent the transfer from happening, while others will allow the transfer to occur but will notify the account holder upon violation of the regulation. True savings accounts do not offer cheque-writing privileges, although many institutions will call their higher-interest demand accounts or money market accounts "savings accounts."

All savings accounts offer itemized lists of all financial transactions, traditionally through a passbook, but also through a bank statement.

Regulations

In the United States, under Regulation D, 12 CFR 204.2(d)(2), the term "savings deposit" includes a deposit or an account that meets the requirements of Sec. 204.2(d)(1) and from which, under the terms of the deposit contract or by practice of the depository institution, the depositor is permitted or authorized to make up to six transfers or withdrawals per month or statement cycle of at least four weeks. The depository institution may authorize up to three of these six transfers to be made by check, draft, debit card, or similar order drawn by the depositor and payable to third parties. There is no regulation limiting number of deposits, however some banks may choose to limit deposits themselves.

Within most European countries interest paid on deposit accounts is taxed at source. The high rates of some countries has led to the development of a significant offshore savings industry. The European Union Savings Directive has made arrangements with many offshore financial centres for either information on interest earned to be shared with EU tax authorities or for withholding tax to be deducted on interest paid on offshore accounts, because of concerns relating to potential tax evasion. Account holders must either pay the withholding tax or disclose account holder information to relevant tax authorities.