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Checking vs. savings accounts

Paying bills or building your nest egg? Access to your money is the biggest difference.

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Checking and savings accounts are popular options that can keep your money safe. But one is better for saving, and one is better for spending. Compare rates, fees, access and other features to find out whether a checking vs. savings account is right for you.

What’s the difference between a checking and savings account?

Checking accounts are designed for everyday spending. They come with a debit card and give you a convenient way to pay bills, withdraw cash, transfer funds and deposit money.

Savings accounts provide a safe place to store your money for later use.

Use this table to compare each feature to see which account makes the most sense for your financial situation.

Best forSpending Saving
InterestSometimes, average rate is 0.04%Yes, average rate is 0.06%
Debit/ATM cardYesSometimes
Check writingYesRarely — varies by bank
ATM accessYesRarely — varies by bank
FDIC insuranceYesYes
Minimum depositVaries widely, typically between $0 and $100+Varies widely, typically between $0 and $500+
Withdraw restrictionsNoYes
Common fees
  • Monthly fee: $0 to $25
  • Overdraft fee: $25 to $40
  • ATM fee: $1 to $3
  • Monthly fee: $0 to $25
  • Excessive transaction fee: $5 to $15
  • ATM fee: $1 to $3

Checking vs. savings account: Which is better for me?

Checking accounts are transactional and designed for everyday use, while savings accounts are more restrictive. They serve different purposes, but they can also work together. However, if you’re only looking for one, the best option will depend on what you plan to use it for.

Pick a checking account if …

  • You need unrestricted access to your money
  • You plan on making multiple transactions per month
  • You want features like overdraft protection and bill pay

Pick a savings account if …

  • You don’t need easy access to your money
  • You’re looking to save money and earn interest
  • You want to limit your spending

Should I get a checking and savings account?

Having both a checking account and a savings account could help you manage your money and save better. Your checking account provides flexible access to cover expenses, bills and more, and you can transfer any extra money to your savings account to earn interest. Plus, some banks allow you to set up overdraft protection that uses funds from your savings account to cover checking transactions.

Should I open a checking account and savings account at the same bank?

It depends. One of the benefits of keeping your accounts at the same bank is that many institutions will waive monthly fees or provide free overdraft protection for your linked accounts. Plus, it’s easy to transfer funds between accounts almost instantly. But this can work against you if you’re tempted to dip into your savings and spend the money on other things. If you prefer to keep your savings “out of sight, out of mind,” you may be better off keeping both accounts at separate institutions.

Keep in mind that not all banks offer both checking and savings accounts. Often times the ones with the best savings account rates don’t offer any checking products. In this situation, you may have to keep your accounts at two separate institutions anyway.

Are checking accounts and savings accounts safe?

Checking and savings accounts are both safe as long as they’re federally insured through the FDIC or NCUA. This federal insurance refunds up to $250,000 if your bank fails or goes under.

A checking account may be more vulnerable to fraudulent activity because it comes with a debit card. A thief can steal your card information and withdraw funds or rack up unauthorized purchases. That’s why it’s considered best practice to keep one or two months of expenses in a checking account and the rest in savings.

Pros and cons of checking vs. savings accounts

Checking and savings accounts have quite a few things in common. They’re both federally-insured up to $250,000, and they both have common fees for monthly maintenance, ATM usage, paper statements, inactivity and more. But they each have unique pros and cons:

Checking accounts

  • Unlimited access. With a checking account, you can make as many transactions as you’d like since there’s no federal restriction.
  • Low opening deposits. Checking accounts typically have lower minimum deposit requirements than savings accounts. Some even let you get started with $0.
  • Features. Many checking accounts offer features like overdraft protection, bill pay, rewards programs and more.
  • No interest. Although some checking accounts earn interest, most don’t. This means your balance won’t grow while it sits in your account.
  • Easy to overspend. With no limit on how many transactions you can make, there’s nothing stopping you from spending.
  • Balance can go negative. Most checking accounts allow you to make purchases even after your balance drops to $0, which could result in costly overdraft fees.

Savings accounts

  • Limits spending. Savings accounts have certain withdrawal limits due to Regulation D, which can prevent you from spending and encourage you to save.
  • Can’t overdraft. Savings accounts don’t come with a debit card or checkwriting privileges, which means it’s nearly impossible to reach a negative balance.
  • Earns interest. Savings accounts pay interest on your balance, so you’ll earn money simply for holding money in the account.
  • Limited access. While savings accounts can limit your spending, they could also prevent you from accessing your money when you need it.
  • Higher deposits. Most savings accounts have higher deposit requirements than checking accounts.
  • Lack of features. Unlike checking accounts that offer perks for using the account, savings accounts typically don’t have as many features.

How do I know if I have a checking or savings account?

Here are three ways to figure out what type of account you have.

  • Look at the name of the account. If it has the words “checking” or “spend” in the title, it’s a checking account. If it has the words “savings” or “save” in the account, it’s a savings account.
  • Read the account agreement. This document should clearly list if it’s a checking or savings account. If not, any mention of overdrafts points to it being a checking account. Excessive withdrawals mean it’s a savings account.
  • Call the bank. If you still can’t figure out what type of account you have, contact customer service and ask. They’ll let you know on the spot.

How to compare checking accounts vs. savings accounts

To find out if you need a checking account or a savings account, think about features such as:

  • Interest rates. Most checking accounts don’t pay interest, while you could earn up to 2% or more with the right savings account.
  • Deposit requirements. Initial deposit requirements will vary whether you choose a savings or checking account, but checking accounts generally have lower requirements.
  • Features. Checking accounts often have more features such as overdraft protection, cash back and bill pay.
  • Fees. Checking accounts are more likely to have fees, but you should watch out for additional charges no matter which option you choose.
  • Access. Checking accounts give you more access to your money, but if you’re looking for an incentive to save, savings accounts have limits to discourage spending.
  • Security. Both accounts are eligible for FDIC deposit insurance, but only if the issuing bank is FDIC-insured.

Compare checking vs. savings accounts

Use the tabs on the table to explore checking and savings accounts. Sort each tab by minimum deposits, fees and more. To compare multiple accounts side-by-side, click the “Compare” box next to your top picks for an alternative view.

Name Product APY Minimum deposit to open ATMs Out-of-network ATM fee
Chime Spending account
38,000 fee-free ATMs nationwide
Get rid of fees with this mobile-first bank offering consumer-friendly accounts. Chime can also help you save easily and access your paycheck faster.
HSBC Premier Checking
Free to use at all ATMs in the US
Get a 3% cash bonus, up to $600 (max. $100 per month) during first six months after account opening. Must open HSBC Premier checking account through offer page by September 30, 2020, and set up qualifying direct deposits into the new account. Conditions apply. Deposit products are offered in the US by HSBC Bank USA, N.A. Member FDIC.
BBVA Online Checking
No ATM fees nationwide at more than 64,000 AllPoint, participating 7-Eleven and BBVA USA ATMs
A full-service account with convenient, surcharge-free access to two massive ATM networks.
Axos Bank Essential Checking
ATM fees reimbursed at any ATM nationwide
No fees. Unlimited domestic ATM fee reimbursements.
Axos Bank Rewards Checking
ATM fees reimbursed at any ATM nationwide
Earn up to 1.25% APY while enjoying a suite of digital tools for smarter money management.

Compare up to 4 providers

Name Product Interest rates (APY) Fee Minimum deposit to open Interest earned
American Express® High Yield Savings
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
Aspiration Spend & Save Account

1.00% on $0 to $10,000 but you’ll need to be enrolled in Aspiration Plus and make at least $1,000 in debit card purchases a month
$0 per month or $15 per month for Aspiration Plus ($12.50 per month if you pay annually)
Deposits are fossil fuel-free and insured by the FDIC. Enjoy a spend and save combo account with unlimited cash back rewards and a $100 bonus when you spend $1,000 in your first 60 days.
Axos Bank High Yield Savings
No monthly maintenance fees. No minimum balance requirements. Interest compounded daily.
CIT Bank Money Market
A savings account with a higher-than-average rate and minimal fees.
SoFi Money
SoFi Money® is a cash management account that charges no account fees to save, spend, and earn cash back rewards when you spend on brands you love.

Compare up to 4 providers

Bottom line

Open a checking account to get easy access to your money or a savings account to earn interest and limit spending — or open both to cover all of your financial bases. Either way, compare options to find the right one for your financial needs.

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