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A savings account is a deposit account held at a retail bank that pays interest but cannot be used directly as money in the narrow sense of a medium of exchange (for example, by writing a cheque). These accounts let customers set aside a portion of their liquid assets while earning a monetary return.
In the United States, the term "savings deposit" includes a deposit or an account that meets the requirements of Sec. 204.2(d)(1) of Regulation D (FRB). The depositor is permitted to make up to 6 pre-authorized transfers or withdrawals (excluding withdrawals via an automated teller machine) per month or a statement cycle of at least four weeks. There is no regulation limiting number of deposits into the account. Violations of Regulation D often involve a service charge, usually $10 per transaction, or even a downgrade of the account to a checking account.
A savings account linked to a checking account at the same financial institution can help prevent fees due to overdrafts and reduce banking costs.