A Stress-Free Guide to Account Options (And Why They Matter)

Woman relaxed on bed sipping coffee and using a laptop computer. Concept of stress free moment.


“Open an account with us – and get a free toaster!”

These days, the bank toaster (clock radio, electric blanket, or other gadget) has become a cliché for consumer banking. But what you might not know is that the decline of kitchenware freebies over the years is directly linked to a new development in America’s banking options: high-interest accounts.

Back in the 1960s and ‘70s, financial institutions were strictly regulated by the government to limit the amount of interest they could offer customers. So if one bank couldn’t beat a competitor’s interest rate, offering a free toaster might be enough to sweeten the deal.

In 1982, however, Congress passed legislation that allowed banks and credit unions to offer accounts that paid a higher “money market” rate, as opposed to the lower capped rate. That enabled banks to provide money market accounts and other high-yield options with better interest than standard checking and saving. Out went the free toasters … and in came new banking options.

Of course, getting more bang for your buck means engaging in a bit of give-and-take. As a rule, the higher the interest rate on an account, the more restrictions there are; conversely, minimally restrictive and no-fee options tend to provide little (or zero) interest.

If you’re considering adding a new account to your financial portfolio, it’s important to understand all your options. Here are a few to get you started:

Basic: Checking. If you’re looking for a no-frills place to store your money safely, this is for you! Many banks and credit unions offer FDIC-insured checking accounts with no minimum balance, no fees, and very few restrictions. The downside is that your money won’t grow when you aren’t using it: Most checking accounts offer zero interest on your balance.

Easy: Savings. Want to put back some funds for a rainy day? Consider a savings account. They don’t usually have a minimum balance, so you can start small – and your money will be safe and secure in case you need to access it later. Savings accounts aren’t designed for day-to-day use, but they do offer a very small amount of interest: usually around 0.01 – 0.05% APY.

Intermediate: Money market accounts. For those considering higher-interest options, this is the place to start. Money market accounts can be used for transactions, and some even offer debit cards – but they typically require higher minimum balances and have more complex rate structures. In exchange, they offer more interest than a standard savings account.

Complex: High-yield checking and saving. If you’re really interested in making your money work for you, a high-yield account can offer some of the best interest on the market. However, they often come with a range of restrictions, such as a minimum balance, transaction limits or requirements, and fees if those restrictions aren’t met.

Of course, a money market account or high-yield account shouldn’t be the first or only account in your financial portfolio. But if you’re looking to diversify, they can offer a range of useful features while growing your money in a safe place.

Before you launch into a new financial commitment, do your research. Each bank will have something different to offer, so it’s worth popping in to see what options are available – and which can suit your financial needs.

At Axiom Bank (Member FDIC), we offer a range of consumer and commercial accounts – and our team of friendly neighborhood experts are happy to find a customized plan that can make your life easier.