A savings account is an interest-bearing deposit account held at a bank, Post office or another financial institution like Nidhi Company that provides a modest interest rate. These accounts let customers set aside a portion of their liquid assets while earning a monetary return. The bottom line is that any solid financial plan rests on a foundation of liquid assets, such as cash and the money in your checking account. Your checking account may handle your everyday expenses, but there are good reasons to have extra money in a savings account. Savings account is an interest-bearing account with certain limitations.