Savings accounts are the most common and the easiest to acquire bank accounts available. Savings accounts are usually the first type of account a person will open and can be a great way to ensure that they always have a nest egg tucked away for those unanticipated emergencies.

Making Saving Work for You
Savings accounts generally earn a low interest rate. Some bank will require you to maintain a certain balance to avoid fees while others offer totally free accounts as a way to lure in customers to more lucrative services.
Perhaps the biggest benefit to putting your money in a savings account is to discourage you from spending it so easily. Money that is tucked away is out of sight and out of mind is less of a temptation. A penny saved is at least a penny earned and it's much easier to save what you've already earned than to earn more. Slowly but surely your money will grow.

Savings accounts are also a good way to protect your money against theft. Banking is so convenient these days that having your money in the bank is like having it in your mattress, only more secure. The FDIC will protect your account up to $250,000 against theft and bank failure.

The money in the savings account will also earn you interest. Generally this won't be very much, but it can be enough to offset losses in capital caused by inflation. Banks are in essence paying you for the use of your money, just like you had given them a loan. The difference is you can call in that loan any time you choose and withdraw your money. Accounts that give the banks more assurance that you won't suddenly decide to withdraw your money usually pay a higher interest rate. One example is a money market account which usually restricts the amount you may withdraw at one time.

That's a very basic overview of how savings accounts and interest work. Everyone should have a savings account even if you only ever have a few hundred dollars in it. Besides being a hedge against misfortune, it will also help you build financial credibility.