Checking account vs savings account – What are the differences? Most people have a checking account and a savings account.
When it comes to choosing between a checking account and a savings account, it can be difficult to know which one is right for you. Both have their own unique benefits and drawbacks. So it’s important to understand the differences between them before making a decision.
Continue reading below to learn the differences between a checking and a savings account. How they’re similar, and when one is better than the other.
The Key Differences
At their core, checking and savings accounts are both ways to store your money and access it when you need it. There are some key differences between the two types of accounts.
If your looking to spend on a daily basis, having a checking account is a more viable option. If saving is your priority, then it’s best to open a savings account.
Checking accounts also usually have fewer restrictions on withdrawals. Savings accounts offer higher interest rates than checking accounts. Making them a better choice for growing your money over time.
Nav business checking talks about checking accounts having more perks. It’s because checking accounts have a monthly fee, while savings accounts do not. This is because banks make money off of the transactions that occur in a checking account.
Both checking and savings accounts are FDIC insured. You can rest assured your money is safe in either account.
Benefits of Using a Checking Account
One of the main benefits is that checking accounts offer easy access to cash which can be helpful in case of an emergency. Checking accounts typically have more features and protections than savings accounts. These include fraud protection and overdraft protection.
Checking account holders can withdraw their money more and without fees. Checking accounts can help individuals keep track of their spending and budget more effectively.
The smallest balance required can vary depending on the bank, but it is usually around $300.
Benefits of Using a Savings Account
A savings account is a great way to set aside money for future goals, such as a down payment on a house or a trip.
Your money is still easily accessible, but you may have to pay a fee if you need to withdraw it before a certain time.
Another benefit of a savings account is that it can help you earn interest on your deposited money.
Fees Associated With Checking Accounts vs Savings Accounts
Both accounts have different fees associated with them.
There are fees included on a checking account. These fees include account maintenance fees, transaction fees, and fees for bounced checks. Savings account fees can include an account maintenance fee and a withdrawal fee.
The biggest difference between checking and savings account fees. Checking account fees are much higher than savings account fees.
Checking account vs Savings Account. Best to Have Both
You can now choose and know the difference between a checking account vs savings account.
A checking account is a good option if you need quick and easy access to your money. If you want to earn interest on your deposited funds, open a savings account.
If you need quick access to your cash, a checking account may be the better option. If you want to earn interest on your deposited funds, a savings account may be the better choice.
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