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Checking vs. savings accounts
Paying bills or building your nest egg? Access to your money is the biggest difference.
Checking and savings accounts are popular options that can keep your money safe. But one is better for saving and the other is designed to help you manage your money. Compare rates, fees, access and other features to find out which is right for you.
What’s the difference between checking and savings accounts?
Checking and savings accounts can both provide a safe place to keep your money. Compare their features to see which makes the most sense for your financial situation.
|About||Provides easy access to your money with an ATM card and checks. Used as a convenient way to pay bills, withdraw cash, transfer funds and deposit paychecks.||Designed to help you save by limiting access to your money to six withdrawals a month and paying interest on your balance. Most don’t come with ATM cards or checks.|
|Check writing||Yes||Rarely — varies by bank|
|ATM access||Yes||Rarely — varies by bank|
|Minimum deposit||Varies widely, typically between $0 and $100+||Varies widely, typically between $0 and $500+|
|Monthly fees||Varies, typically $0 to $25+||Varies, typically $0 to $25+|
Which is better for me, a checking or savings account?
Checking and savings accounts 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 both?
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.
Pros and cons of checking vs. savings accounts
Checking and savings accounts are both helpful banking products, but they each have their pros and cons:
- Unlimited access. With a checking account, you can make as many transactions as you’d like since there’s no federal restriction.
- FDIC insurance. Checking accounts are eligible for FDIC insurance, which protects up to $250,000 of your money.
- Features. Many checking accounts offer features like overdraft protection, bill pay, rewards programs and more.
- No interest. Most checking accounts don’t pay interest, so your balance won’t grow while it sits in your account.
- Potential fees. Checking accounts often have monthly fees and other charges for ATM usage, overdraft protection, paper billing and more.
- Easy to overspend. With no limit on how many transactions you can make, there’s nothing stopping you from spending.
- Limits spending. Savings accounts are limited to six transfers per month, which can prevent you from spending and encourage you to save.
- FDIC insurance. Savings accounts are also eligible for FDIC insurance, meaning your money is protected while it sits in your account.
- Earns interest. Savings accounts pay interest on your balance, so you’ll earn money simply for holding a balance 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.
- Deposits and fees. Savings accounts could have higher deposit requirements than checking accounts and will most likely have fees as well.
- Lack of features. Unlike checking accounts that offer perks for using the account, savings accounts typically don’t have as many features.
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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.
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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