Although all of your income goes to the same place, knowing the best type of storage for your money benefits saving and passive income. Different banks offer different services and benefits, but they generally have four different account types.

Checking
The simplest kind of bank account, also known as checking accounts, allow you to deposit and withdraw money both online and with a card. Money can be added to the account by depositing cash or checks into an ATM (automatic teller machine). This money will sit in the account for as long as you want it to without changing since checking accounts don’t gain passive interest. Some banks charge monthly fees, overdraft fees, ATM fees and more. When starting your banking account career as a student, most banks will open a checking account, easily allowing one to spend and store money with minimal fees.

Saving
Savings accounts work very simply, only allowing money to be saved and stored. Money can be transferred from a checking account to savings very easily using your online banking app or filling out a transfer form and giving it in person to a teller. After adding the minimum amount to your savings account, you will start gaining passive compound interest. The national average interest rate is 0.45% APY. Having a savings account easily allows you to store and transfer your money with minimal fees.

Certificate of deposit (CDs)
Certificates of deposit work very similar to savings accounts, but you keep money in there for a designated time and can not be taken out until the maturity date without getting a fee. This is the safest way to save money since there is no way for the amount of money in the account to depreciate. This account gains even more interest than a normal savings account at around 1.73% APY for a one-year CD, 1.41% APY for a three-year CD and 1.42% APY for a five-year CD.

Money market accounts (MMA)
Money market accounts allow you to save money like savings accounts, but they’re meant for larger sums of money. The more money put into this account, the higher APY. The problem with MMA is that there needs to be a lot of money to get a higher APY than you would with a simple savings account or a CD. Money can be withdrawn straight from the MMA, allowing more flexibility and easier use than a savings account. This money can also be taken out multiple times or as many times as you need, again changing with the bank.