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Savings and checking accounts are two of the most common products banks and credit unions offer, but they serve very different purposes. Checking accounts make it easy to spend your money while savings accounts — you guessed it — are better for saving your cash.
However, when it comes to our finances, it can feel like our list of decisions is never-ending.
Should I start saving for retirement now? How should I file my taxes this year? Do I need homeowners and flood insurance?
To make any decision about money, it helps to have all the pertinent information.
When deciding whether to open a checking or savings account, you should start by knowing how they differ.
So What’s the Difference Between Checking and Savings Accounts?
At the simplest level, customers use a checking account for spending money and a savings account for saving money. Typically (though not always), customers open both bank accounts with the same bank or credit union.
Savings vs. Checking At a Glance
| Features | Savings Account | Checking Account | ||
|---|---|---|---|---|
| Best for | Saving money | Spending money | ||
| Interest | Yes, varies by bank | Sometimes, but typically low | ||
| Potential fees | Monthly maintenance; withdrawal limits | Maintenance; overdraft; ATM; checks; lost card | ||
| Withdrawal limits | Typically six | n/a | ||
| Minimum balance | Varies by bank account | Varies by bank account | ||
| Depositing | Direct | Direct and mobile check | ||
| Typical features | ATM card (some banks) | Checks; debit card; overdraft protection |
What Is a Checking Account?
A checking account offers customers an easy way to spend their money: with paper checks, with debit cards, through money transfer apps and via online checkouts.
These accounts are typically insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) up to $250,000.
Checking accounts typically come with a debit card and…
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