Which accounts should every adult have? To name a few: savings, checking, investing, retirement, and credit accounts, all of which put you on the path to financial success.

One of the categories they don’t teach in school is selecting and managing bank accounts…Or much of anything related finances really. So, when you’re finally on your own, how do you know which accounts are the best for you and which ones can wait? 

Although there is no shortage of account types available, it’s important to understand which ones should create the base of your financial life. No matter how old you are or where you are starting from, here are the five basic accounts everyone should have. 

Savings accounts: the bedrock of banking

Do You Have The Right Accounts? Here Are The Financial Accounts Everyone Should Have - Savings accounts

At the core of your financial life is the savings account: a retail banking product dedicated to building a nest egg towards future goals. Savings accounts come in many different shapes and sizes. While some credit unions require you to open a savings account to join, other banks offer them as a complementary product to checking accounts. 

As their name suggests, you can’t spend money directly out of a savings account, but you can directly deposit money into it. In turn, the bank will pay you a small amount of interest for holding your funds with them. If you need to use your savings, you will either have to withdraw it at a bank branch or move money out of your savings account and into a checking account. 

Despite their limitations, savings accounts can come with some flexibility, depending on where you deposit your money. Some accounts can serve as a direct backup to your checking account to ensure you don’t overdraw, while others allow you to dedicate some of your savings towards other products, like a secured credit card or investments. 

Before opening an account, be sure to understand all the benefits and drawbacks. Start by comparing savings products across different banks and credit unions – nearly all financial institutions will advertise rates and advantages online. While some accounts may offer benefits for holding checking and savings accounts, others may offer a higher yield with a standalone account. 

Do I need a high-yield savings account?

The term “high-yield savings account” refers to a specific type of product that offers a higher interest rate than traditional offerings from banks or credit unions. A high-yield account often comes with tiered rewards, meaning the more you save, the more interest you will earn.

However, a high-yield account only offers an advantage if you already have a large amount of money to deposit. Otherwise, it may not offer any more returns than a traditional savings account. Before opening a high-yield savings account, ask the following questions: 

  • How much money am I saving? An emergency fund should cover at least three months of expenses, including home payments, car payments, and living expenses. If you have a savings fund established, a high-yield savings account could make perfect sense. If you are still building your savings, a traditional savings account may be better. 
  • What is my goal for this money? If stable, guaranteed growth of your emergency fund is your primary goal, it’s hard to beat the rate-of-return from a high-yield savings account. However, if you don’t anticipate you will need to access the money for a long time, other options – like a certificate of deposit – could help your cash grow faster than inflation. 
  • When will I need this money? Every dollar you earn should have a purpose – including your savings. If you are putting cash away for an emergency fund or a big purchase, then a high-yield savings account will help you earn more through compounding interest on your deposits. On the other hand, if you like putting away big monthly payments so they don’t get spent (like rent or car payments), a traditional savings account will work just as well. 

As a suggestion, the CIT Bank Savings Builder is one of the best high-yield options for those building their savings. With a minimum deposit of $100 each month, you could earn 1.00% APY on your deposit, making it one of the best yields on your money with a small commitment. See details here.

CIT Bank. Member FDIC.

Checking accounts: money for everyday spending

Opening a savings account is only the first step towards true financial freedom. Eventually, you will need an account for everyday spending, from getting groceries to paying for rent, utilities, and car loans. 

The checking account is the standard-bearer for spending accounts, offering you the most flexibility with your money. In addition to writing checks to make purchases, you will be able to spend with a debit card nearly anywhere plastic is accepted, and withdraw cash from almost any ATM. No matter where you need money, a checking account can help you access it, making it a must-have account. 

Bank, brokerage, or credit union: which offers the best checking account?

With increases in technology, there’s no limit to the number of financial institutions offering checking accounts to consumers. The bank that worked for your parents may not be the best fit for your overall goals.

When it comes to deciding where to start your account, should you put your cash in a bank, a credit union, or with a brokerage bank? 

Traditional brick-and-mortar banks offer a lot of stability for new account holders. In addition to having access to a regional or nationwide branch network, you can also withdraw cash fee-free from any of their ATMs. However, the major banks may not offer free checking accounts unless you hold a certain amount of cash with them, which can be difficult if you are just starting out. Moreover, they will often charge a nominal fee anytime you don’t use their ATM, atop any fees the ATM owner may charge. 

Online banks offer an alternative option for digital-first consumers. Without physical branch buildings, these banks usually offer no-fee checking accounts and fee-free transactions at any ATM in the country. On the downside, the lack of branches can make it difficult to get help if things go bad, or if you need specialized products like cashier’s checks, traveler’s checks, or foreign currency prior to a trip. 

An example of an account worth looking into that has no fees or minimum deposit requirements is the Discover Cashback Debit account. You can earn up to 1% cashback on any purchase that you make with your debit card (capped at $3,000 in spending per month), making it one of the better accounts around.

Credit cards: earn rewards with expanded protections

Do You Have The Right Accounts? Here Are The Financial Accounts Everyone Should Have - Credit cards

Although your checking account debit card gives you plenty of ways to spend your hard-earned money responsibly, it shouldn’t necessarily be your first choice. Instead, credit cards offer a beneficial alternative, with plenty of consumer protections

Credit cards offer a flexible line of spending for your everyday needs and are accepted virtually everywhere. In many cases, credit cards come with benefits including zero-liability guarantees in case somebody steals your credit card number and tries to use it, or manufacturer’s warranty extensions to give your stuff new life. Furthermore, responsible use of your credit card will help build your credit file, which can help you make major purchases down the road – like a car or even a new home

How do I know which kind of credit card to get?

One of the key advantages of spending on a credit card instead of a debit card is earning rewards. Cash back rewards from cards like the Chase Freedom Flex℠, flexible points such as Ultimate Rewards® from the Chase Sapphire Preferred® Card, or airline miles and hotel points can all help you get closer to a discounted vacation or effectively a free purchase. But is a rewards credit card right for your lifestyle? 

Rewards credit cards work best for those who can stick to a budget and pay off their credit cards on time. Because these cards pay out cash back or points, they come with an annual fee and higher interest rates than most other credit cards. If you don’t pay off your credit card every month, you’ll end up paying more in interest than the points are worth. 

On the converse, the best low-interest credit cards won’t offer rewards for your everyday spending but will charge you less over time for carrying a balance. For example, if you spend $3,000 on a credit card with 12% interest, and plan on paying down the balance over 12 months, you would pay the issuer around $263 in interest. If you made the same spend on a card that offers you 2% cash back but charges 18% interest, you would earn $60 in rewards, but pay around $425 in interest. 

Retirement accounts: saving for the future

Earning money shouldn’t just be limited to today’s spending and needs. What happens in your future, when you are ready to retire? To ensure a comfortable life into your golden years, it’s critical to start saving for retirement now

If you have a traditional job, your employer may offer access to a 401(k) account with a matching contribution. This retirement account can go with you if you decide to change jobs in the future, giving you a start on saving towards retirement.

In addition, you can also set aside part of your budget to contribute to an Individual Retirement Account (IRA) which offers tax benefits through companies like Betterment. No matter what you choose, though, setting savings goals now can set you up for a reserved income in the future. 

How much should I contribute to my retirement accounts?

When people start their retirement accounts, the first question they often ask is “How much should I save in one?” As with all things in life, it depends on your personal situation. 

While many experts recommend saving 10% of your income, any amount can help you start building wealth to use in your future years.

Investment accounts: building wealth for today

Do You Have The Right Accounts? Here Are The Financial Accounts Everyone Should Have - Investment accounts

You have a savings account to save for a rainy day, a checking account for everyday spending, and a retirement account for long-term goals. But how can you help your money outpace the rate of inflation and ultimately gain results? 

Investing in the stock market today can help you grow your money at a faster pace than savings accounts or other opportunities. Apps like Robinhood makes it easy to get started with zero trading fees.

With the right combination of securities, you can help your cash grow over time, which can help you unlock future goals. It’s equally important to consider that investments have no guaranteed return, and can also lose value over time – meaning you should consider where you put your money carefully. 

Stocks, mutual funds, or ETFs: where should I invest?

For most new investors, there are three main options for investments: individual stocks, mutual funds, or exchange-traded funds (ETFs). Which one is best for your first portfolio? 

Individual stocks are tied to the performance of a single publicly-traded company. Although they can come with big rewards, they can also lose value if the company is involved with a scandal, or doesn’t grow at the expected pace. Investing in stocks takes the most research and consideration to find the right opportunities. 

Mutual funds allow you to invest in a combination of individual stocks, based on a particular industry segment or growth strategy. As a tradeoff, investors are required to pay a fee for its management, and the funds report only once per day. Those who are looking for a long-term strategy that doesn’t require active management may want to consider placing their money in a mutual fund. 

Exchange-traded funds are the happy medium between individual stocks and mutual funds. ETFs trade like individual stocks and can be bought and sold at market rates, but are composed of a number of company shares. Like mutual funds, they also come with management fees. Investors who want to minimize their overall risk while maximizing their potential gains may want to do research into ETFs.  


Staring out on the road to being financially literate can be difficult. By opening and establishing the right savings accounts early – including savings, checking, investing, retirement, and credit cards – you can create a plan that not only helps you save, but also gives you the opportunity to meet your future financial goals.

Read more:

Related Tools

About the author

Total Articles: 5
Joe Cortez is a digital journalist focused on personal finance and travel topics with over a decade of experience as a financial journalist. He is a member of the Society for Professional Journalists, National Association of Hispanic Journalists, and the Radio-Television-Digital News Association. Follow him on LinkedIn and Twitter.