Short Answer 
Sawyer should choose a high-yield savings or money market account to maximize savings, focusing on interest rates and initial deposit requirements. Making a large initial deposit increases earning potential and provides access to better features, while these accounts offer easy access to funds and are FDIC insured for safety.
Step 1: Choose the Right Account Type
To maximize savings, Sawyer likely selected either a high-yield savings account or a money market account. These accounts are designed to offer better returns compared to regular savings accounts. Factors to consider include:
- Account type advantages
- Interest rates
- Initial deposit requirements
Step 2: Make a Large Initial Deposit
With a substantial birthday gift, Sawyer can fulfill the initial deposit requirement that these accounts often demand. Typically, these accounts require a larger deposit than regular savings accounts, which allows for greater earning potential. This step is crucial for:
- Leveraging higher interest rates
- Building a solid savings foundation
- Gaining access to better account features
Step 3: Ensure Easy Access and Safety
One benefit of high-yield savings and money market accounts is that they provide easy access to funds without significant penalties, unlike certificates of deposit (CDs). Sawyer can withdraw his money when necessary, such as for purchasing a car, while also keeping his savings safe. Important points to note include:
- FDIC insurance for fund protection
- No early withdrawal penalties
- Flexibility in managing his finances