What is a Specialty Savings Account? Definition, Pros and Cons

By Sara


Last Updated: September 12, 2022



If you have a specific savings goal, you may want to consider a specialty savings account.

For example, you can have a specialty savings account for Christmas, health, kids, college, and more. These accounts can be great for their very specific purposes. 



What is a Specialty Savings Account? 

A specialty savings account isn’t just one account; it’s a catch-all phrase for a savings account with a specific purpose.

It’s an account that doesn’t fit into the five larger types of saving accounts - traditional, high yield, certificate of deposit, money market, and cash management.

Specialty savings accounts usually have a very specific purpose for them. They are a specific type of account for a very specific savings goal. 



What Are the Types of Specialty Savings Accounts? 

If you have children or plan to have children, there are specialty savings accounts specifically for this.

For example, there are kid’s savings accounts, custodial savings accounts, student savings accounts, and a 529 college saving account. All of these accounts are great to help your child learn to save or ways that you can save specifically for your children’s future. 

There are also other specialty savings accounts for other goals.

For example, there are:

  • Christmas Club savings accounts
  • Home down payment savings accounts
  • Health Savings account (Also known as an HSA).

These three examples are great to see the diversity of specialty savings accounts. So, whatever your goal is, from Christmas gifts to having money for a home, you can find an account to help you reach your goal. 

Some retirement accounts are also considered to be specialty savings accounts.

For example, a Traditional and Roth Individual Retirement Account (Also known as an IRA) are specialty savings accounts. These accounts have stipulations around them and are more of a retirement account and other savings, but it is essentially savings for a specific goal - retirement. 



What to Consider When Choosing a Specialty Savings Account?

When choosing a specialty savings account, consider your financial goals.

Do you have children?

If you do, do you want to set them up for college or for their own savings account? You may want to open a kid’s savings account or a 529.

If you are working, do you have the ability to open up an HSA, or do you want to start planning for your retirement by opening up an IRA? Look at your life and goals to see if there might be a specialty savings account that you would benefit from. 

Once you know what account you want, research the different banks that offer these accounts. Then, just like other accounts, find an account with a low or no minimum balance required and low or no maintained fees.

Also, find out what withdrawals look like for this account and any other special considerations. 



A specialty savings account is great if you have a specific financial goal or person you plan to save money for. They are very specific, so you know exactly what this money will be used for in the future. 

Like other savings accounts, your money will earn interest in a specialty account. This is a safe place to save your money. Most specialty savings accounts have low or no monthly mainlanders fees, which is always a plus. 



Some specialty savings accounts, like IRA’s, HSA’s, and 529’s, have very strict withdrawal rules. These accounts can only be used for specific things and may not allow you to withdraw until a certain age or for a specific use. Make sure you know the rules of these accounts before opening one up. 

While specialty savings accounts do earn some interest, they are not the highest interest-bearing accounts you can get. A high-yield savings account will have one of the higher interest rates. If interest isn’t a huge issue for you, then specialty savings may be a good option. 

Specialty savings accounts can also have restrictions on who can open these accounts. Do your research on this. For a Roth IRA, you cannot make over a certain income. For an HSA, you need high deductible insurance to have this account. 



Final Thoughts 

A specialty savings account is a great option if you have specific financial goals that need a special savings account. There are accounts for children, health, retirement, and even Christmas savings. Each account is unique and can help you reach your goals. However, since they are unique, each account has different rules regarding who can open this account and how you can withdraw your money; always do research before opening an account.


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