Types of Bank Accounts & Their Rates of Interest

Bank accounts offer a variety of accounts to meet the needs of depositors. While specific interest rates can vary greatly depending on economic conditions, general statements can be made comparing rates of interest from one account type to the next.

Checking Accounts

Also called Demand Deposit Accounts, Checking Accounts provide ready access to money. Because funds are available whenever an account holder chooses to make a withdrawal, financial institutions either pay no interest or a nominal amount.

Personal Savings Accounts

A savings account earns more interest than a checking account because the amount of non in-person withdrawals and transfers and payments to third parties is limited.

Money Market Accounts

A money market account is similar to a savings account except it usually provides account holders with a limited number of checks that can be written to third parties. Money markets typically require higher minimum balances than personal savings accounts and in turn pay higher rates of interest.


Certificates of deposit are deposit contracts where depositors promise to leave their funds in the account for a set period of time in exchange for a higher rate of interest than is paid on savings or money market accounts. In general, the longer the term of the CD, the higher the rate of interest.

TDOA accounts

TDOA stands for Time Deposit Open Accounts, which means that account holders pledge to keep deposits in the bank for a fixed amount of time, but depositors can make deposits to the account throughout the term of the deposit. TDOA accounts typically pay interest rates similar to money markets and short term CDs.