It is my understanding that in the past the term "Savings account" used to mean something like, or identical to, a "time deposit" with strong discouragement for savers to take their money out before serving their notice periods. Over the past few decades the discouragement has weakened substantially to a state where there is often no discouragement at all.
Can anyone here confirm that I have indeed got the right idea. And if correct, is there an article somewhere that I could use as a reference?
What Went Wrong with Economics
Yes, savings accounts were meant to hold savings and often came with restrictions: e.g. only a certain number of withdrawals a month/quarter. Today's hig-yield accounts often come with similar restrictions.
Over and above the restrictions, I think that having two accounts has a psychological effect on the holder. Nothing mystical; but, having two accounts (saving and checking) helped the holder organize, and the holder would often use the checking account for money he knows he needs for monthyl transactions, and use the savings account to save for less frequent transactions: drawing it down for the larger purchase that comes along (say) once a quarter. In other words, it might have made financial sense to be more nimble about sweeping the money in and out from checking to savings until one hit the restrictions, but it was not worth the extra effort of keeping track of it all. (Not to mention that in the past one often had to visit the bank to operate your savings account.)