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Banks and credit unions typically offer basic savings accounts, holding the money on account for the depositor and paying interest on the balance. Savings accounts are very safe because the Federal Deposit Insurance Corporation insures them for up to $250,000. 

Depositors may withdraw funds from a savings account at any time.  Because of this, financial institutions pay very low interest on savings account balances. If the main concern is earning interest, not liquidity, Treasury bills and certificates of deposits are better long-term investments than savings accounts.

The main advantage of a savings account over a checking account is that the savings account offers almost the same liquidity, but also pays interest. With the advent of ATM machines and online banking, it has become increasingly easy for depositors to transfer money between accounts.  If a depositor has both a savings account and a checking account, the depositor could effectively have an interest-bearing checking account simply by keeping the bulk of his money in the savings account, and then making periodic transfers from the savings account to the checking account to cover payments drawn on the checking account. Because of this ease in transferring funds, some financial institutions limit the amount of withdrawals per month that can be made from a savings account. 

Finally, the aggregate total of all savings account balances in the United States are included in the calculation of the M1 money supply. 

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