Banking and Finance

Checking vs Savings Account: What’s the Difference?

Checking vs Savings Account: What’s the Difference?

The Federal Reserve System can be traced back to 1914 to stabilize U.S. banking. They work through decentralized, regional Federal Reserve banks to prevent them from being under the federal government or Wall Street’s control.

If you’re thinking of beginning a bank account, you might be curious about the differences between checking vs savings accounts. What are the benefits, and how can they help? Read this guide on the difference between the two and make the right financial decisions today!

Savings vs Checking

Checking accounts allow you to write checks and access them in multiple ways. Savings accounts are for money that you won’t use yet. Savings is there to have a goal of collecting more.

Savings Account

For savings, you might have it for long-term goals such as:

  • Emergency funds
  • Rainy afternoon activities
  • Home repair
  • Vacation
  • And more

Many types of bank accounts will let you connect your savings and checking accounts. Some top private banks will allow you to transfer money even for frequent withdrawals.

Checking Account

You can set up a direct deposit to have money transferred from your job. Pay bills online easily, and order checks online or through the mobile app.

It’s common for everyday shopping and paying bills. You might pay fees if you use an ATM, don’t have a minimum balance, and have bills that cost more than you have available.

High APY

Some bank accounts will have high interest to let you gain more. You’ll be able to grow your balance quicker.

Savings accounts tend to have this more often. While it won’t make you rich, it means more money in your account.

Age Restrictions

If you’re under 18 years old, you’ll more than likely need a parent or legal guardian as a co-owner of the account. Check the terms of the account to ensure that it matches your needs. Savings accounts normally have age requirements as well.

Savings Account Alternatives

Look into a money market account to save. You can write checks, and they come with debit cards. They do have higher minimum balance requirements, though.

A certificate of deposit is an option for large sums of money that you don’t plan on using anytime soon. You’ll need to keep your money in these accounts for a certain period. Certificate of deposits also normally have higher minimum deposits as well.

Some banks have premium checking accounts. This is for customers who have assets to qualify. Premium checking accounts come with perks such as ATM reimbursements and more.

Understanding the Difference Between Checking vs Savings

Choosing between checking vs savings accounts doesn’t have to be hard. Often, you can have both to better suit your needs. Take your time deciding which option or if both are right for you.

Would you like to read more informative and educational content? Then, be sure to check out our other articles on our site today!

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