What defines a savings account?

A savings account is defined as a deposit account that typically offers modest interest on the deposited funds. This type of account is designed for individuals who want to save money over time while earning a small return on their deposits. The principal purpose of a savings account is to facilitate saving rather than spending, making it a safe place to store funds that may be needed in the future while still allowing for some interest accumulation.

This option accurately captures the essence of a savings account, highlighting its role as a financial tool for saving rather than for frequent transactions or credit. By offering interest, savings accounts incentivize individuals to set aside money, which is an important component of financial literacy, as it encourages good saving habits and prepares individuals for future financial needs.

In contrast, the other options focus on definitions that do not align with the primary characteristics of savings accounts.