So you have made the decision to open a savings account but are stuck on settling on the right one that caters to your specific needs, amid the plethora of options.

The Financial wit has just the answers you’re looking for. We have compiled a guide that will assist you to tell the savings accounts apart to give you an easy time in picking out the one that best suits you. Types of savings accounts include:

·         Traditional or Regular Savings Account

The regular savings account, earns interest and offers quick access to funds. This account is recommended for people who need to save money for the short or long term, and are least concerned about getting the best interest rate or the Annual Percentage Yield (APY). These types of savings accounts generally allow you to earn interest on your money, although they usually pay lower rates than other savings products. Many banks and Co-operatives allow you to open a regular savings account, with a low minimum deposit. Traditional savings accounts typically allow you to make a certain number of withdrawals, before incurring a penalty. Banks and co-operatives may allow you to manage your account online, via mobile banking, by phone or at a branch. The interest rates are usually low, compared to other savings options. Monthly maintenance fees may cancel out interest earnings and additional fees may apply, for excess withdrawals.

·         Certificate of Deposit, or CD

A certificate of deposit or CD is a savings account that offers the highest interest rate among savings accounts, but the most limited access to funds. Moreover, it offers a fixed APY for a set amount of time.CD savings accounts are recommended for savers who can make large initial deposits, and won’t need access to it for some time. A basic CD account stipulates that you need to agree to not withdraw the money for a certain amount of time, called a term. CD terms typically range from six months to five years. The longer the term, the better the interest rate. CDs generally don’t charge a monthly fee. To get the best interest rate available, you may be required to deposit a higher lump sum and forego access to it, until the term is up to earn the full amount. Withdrawing money before the end of the term usually warrants a penalty.

·         Money market account.

The money market savings account earns interest and may provide check-writing privileges and ATM access. These accounts combine aspects of savings accounts and checking accounts. By the same token, a money market account offers a higher interest rate than a checking or traditional savings account, but also tends to require a higher minimum balance and initial deposit. Most banks limit you to six or fewer withdrawals per month.

·         Cash management account (CMA)

Cash management accounts are typically reserved for high-net-worth individuals, or those who can make a large lump sum to open an account. These accounts also provide access to your money whenever you need it via a debit card. A cash management account includes features of checking and savings accounts, and is usually offered by nonbank financial service providers like brokerage firms, robo-advisors or investment firms. These accounts often divide a large deposit among multiple partner bank accounts. For instance, if you deposit Kshs 300,000 into a cash management account, it might be broken up into Kshs 100,000 chunks and spread across three different bank accounts. These accounts pay yields similar to what you'll get from a high-yield savings account, though sometimes they're higher. To boot, these accounts also provide access to your money whenever you need it, via a debit card. CMAs typically have no minimum balance requirement. They pay interest and can be especially convenient, if you have an investment account with the same institution.

·         High-yield savings accounts

High –yield savings accounts offer a higher APY, and typically pays 20 to 25 times higher than the national average of a standard savings account, or a traditional savings account. These accounts are recommended for those who are looking to maximize their returns, while preserving easy access to funds. The higher interest rates can be equivalent to more interest earned on your contributions. Online banks are known to offer the best high-yield savings accounts, with APYs currently around 2 per cent and no minimum balance requirements. As you consider different high-yield savings account options, weigh factors such as initial deposit requirements, interest rates, minimum balance requirements, and any possible account fees. Electronic transfers are easy to set up between a high-yield savings account and your checking account, even if you hold them at different banks.

·         Online savings accounts

The advent of the internet saw the evolution of online banks. Hence, online savings accounts are offered by online banks that have no physical branches. These account holders manage and access their accounts, through the bank's website or an app. Furthermore, these accounts pay interest, with some offering a 1 % to 2% APY. Online banks have fewer overhead costs, so their accounts usually have higher interest rates and fewer fees. The advantage of this is that you can manage your account, through your computer or smartphone. Some online savings accounts require you to maintain a minimum balance, limit you to six withdrawals per month, lest you face a penalty.

·         Specialty savings accounts

           This is a special class of savings accounts which include:

1.      Student savings accounts. These accounts are designed with features that make banking easier for young people, with a modest financial means. They typically have minimum, low or no fees.

2.      Kids savings accounts. These are similar to student accounts but are designed for minors. They usually have low or no fees. A parent or guardian will be required to open the account.

3.      Custodial accounts. These accounts are opened by adults on behalf of a minor, and tend to be inclined towards saving investment proceeds. A child may be restricted from accessing the funds until they reach a certain age. 

4.      Health Savings Account-This account is designed for a singular purpose, to pay medical expenses.

5.      Individual Retirement Accounts-These savings accounts are designed for long-term goals like retirement.