Checking Account

A checking account is the most common and versatile bank account—it’s a transaction account used for everyday life, like depositing money, making purchases, and paying your bills.

Your checking account should handle the “day-to-day” logistics of your life. Because checking accounts are built for high activity, they usually come with a debit card and easy access to online bill pay.

The Strategy: Treat this as your central hub for cash flow. Most people already have one, so if you do, go ahead and check this off your to-do list!

But if your bank charges you a “monthly maintenance fee” just to keep the account open and running, it might be time for a switch. Look for a “No-Fee” checking account so you aren’t paying the bank to hold your money, because it should be the other way around.

High-Yield Savings Account

A high-yield savings account (HYSA) works exactly like a regular savings account, with one major upgrade: it boasts a significantly higher interest rate.

Most people leave their savings in a brick-and-mortar bank out of habit; your first account was likely opened for you at a traditional bank, so it’s natural to want to keep it simple.

But you might be missing out on some crazy earnings. Check out this comparison:

• Standard Savings Account: Your typical savings account usually earns around 0.62%, which means if you have $1,000 in your savings account, you’ll make just $6.20 in interest in one year.
• HYSA: High-yield savings accounts offer interest rates anywhere from 3.5—4.5%, which means that same $1,000 could make you $45 in one year. (That’s free money, just for choosing the right bank account.)

Many online-only banks (like Ally, Axos Bank, or SoFi) offer the best HYSA rates because they don’t have the overhead costs of physical buildings. Just make sure the bank is FDIC insured so your money is protected up to $250,000.

The Strategy: Use a HYSA for your emergency fund or short-term goals (like a vacation or a new car). It keeps your savings separate from your spending money in your checking account so you aren’t tempted to touch it. Plus, it’s compounding quickly while it sits in storage.

Investment Account

If the checking account is for “now” and the savings account is for “soon,” the investment account is for “later.”

With investment accounts, you can buy assets like stocks, mutual funds, and bonds that should rise in price over time, therefore making you money.

The secret weapon of investment accounts is compound interest. Through compound interest, the earnings on your investments start to make their own money, too.

It’s a snowball effect that turns small, consistent contributions into significant wealth over decades. So the biggest advantage of starting in your 20s isn’t how much money you have; it’s how much time you have.

Common Types of Investment Accounts:

• 401(k) or 403(b): These accounts are retirement accounts often offered through your employer. If they offer a “match” (e.g., they put in $1 for every $1 you contribute), take it—that’s free money! No girl math needed.
• Roth IRA: A Roth IRA is a personal retirement account where you contribute “after-tax” money. Because you contribute money that has already been taxed, the government leaves it alone from then on. Your money grows tax-free, and you won’t owe taxes when you withdraw it at retirement. This tax benefit makes it an overpowered strategy for your 20s: you pay taxes now while your income (and tax bracket) is likely lower, so you can keep 100% of the growth later, even when you’re a high earner.
• Brokerage Account: Your brokerage account is the most flexible investment account. There are no age requirements to withdraw your money, but you won’t get any tax breaks. Here is where you invest the money you might want to access before retirement, but still not for a while (like for a house down payment 10 years from now).

The Strategy: The goal here is long-term growth. Through the power of compound interest, the money you invest in your 20s has the potential to grow exponentially by the time you reach retirement, so begin contributing as early as you can—even if it’s just $50 a month. We all start somewhere : )

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Mastering these three accounts is the first step toward writing a financial story you actually enjoy. You don’t need to be a math genius or an investing expert to get started—you just need to take that first step toward organization.