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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. They’re both deposit accounts protected by federal insurance, but savings accounts are meant to hold money to accrue interest, and checking is for spending.

What’s the difference between checking and savings accounts?

Checking accounts are designed for everyday spending. They come with a debit card and offer a convenient way to make purchases, withdraw cash, transfer funds and deposit money. They offer ATM access through the debit card and don’t have transaction limits.

Savings accounts provide a safe place to store your money while earning an annual percentage yield (APY), which means your balance passively earns interest. Most savings accounts limit you to up to six transactions per month, even though the Federal Reserve’s Regulation D has been suspended. Some savings accounts offer an ATM card, but it’s not very common.

Quick view: Checking vs. savings accounts

CheckingSavings
Best forSpendingSaving
InterestSometimes, average rate 0.08%Yes, average rate 0.45%
Debit cardYesNo
CheckwritingYesNo
ATM accessYesSometimes
FDIC insuranceYesYes
Minimum depositTypically between $0 and $100+Typically between $0 and $500+
Transaction limitsNoYes, typically up to 6 per month
Common fees
  • Monthly fee: $0 to $25
  • Overdraft fee: $25 to $40
  • ATM withdrawal fee: $1 to $3
  • Monthly fee: $0 to $25
  • Excessive transaction fee: $5 to $15

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

Checking accounts are meant for frequent transactions and everyday use. Savings accounts are more restrictive but let you passively earn on your balance.

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
  • You want a debit card to make purchases

Pick a savings account if …

  • You have funds you don’t need to access daily
  • You’re looking to save money and earn interest
  • You want to limit your spending

If you’re not sure which to choose, there are also hybrid accounts, like the SoFi Checking and Savings account, which is a checking and savings account in one. A money market account is another option to consider. They earn interest like a savings account but come with a debit card and checkwriting privileges like a checking account.

Are checking accounts and savings accounts safe?

Checking and savings accounts are both safe as long as the bank or credit union is federally insured through the FDIC or NCUA. This federal insurance protects deposit accounts up to $250,000 if your bank fails or goes bankrupt. This insurance is per account holder — not $250,000 for each account you have with the same bank.

However, 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 just one or two months’ worth of expenses in a checking account and the rest in savings.

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

Opening both accounts with the same institution offers convenience, but it may not be the best idea for everyone.

Pros

  • Banks may waive monthly fees if you have multiple accounts
  • Overdraft protection may be available when you link both accounts
  • Possible discounts on other products through loyalty or relationship programs
  • View both accounts under one online banking platform
  • Instantly transfer funds to and from both accounts

Cons

  • May be tempted to transfer funds out of savings and into checking
  • Up to $250,000 insurance at a single bank per account holder — not per account

How to choose a checking account

Checking accounts are made for everyday use, so comparing their fees and functionality is key in choosing the right one.

  • Opening deposit. Many require an opening deposit, often $25 to $100.
  • Monthly fee. You may have to pay a monthly maintenance fee to keep the account open, which is often around $5 to $25 per month, but there are a lot of free checking accounts.
  • Interest bearing. There are interest-bearing checking accounts, which can earn interest on your checking balance. The rates are typically lower than savings accounts, but it’s better than nothing!
  • Extra features. There are checking accounts with rewards, overdraft protection, bill autopay, perks for setting up direct deposit and even sign-up bonus incentives.

How to choose a savings account

The number one factor in choosing a savings account is how much it can earn over time.

  • Interest rate. The average rate on a savings account is 0.45%, but that doesn’t mean all accounts meet or exceed the average. Many high-yield savings accounts have rates much higher than the national average.
  • Opening deposit. You may be required to meet an opening deposit requirement, often around $25 to $100 or more.
  • How the interest accrues. Many savings accounts are compounding, which means you’d earn interest on the whole balance, including previously earned interest. But some are simple interest, which means you won’t earn interest on your interest, just on the funds you’ve deposited.
  • Transaction limits. Most savings accounts limit transactions up to six times per month. However, the regulation that required this limit is currently suspended, so some accounts don’t have this limitation.
  • ATM access. There are savings accounts with ATM cards, offering the ability to withdraw funds via ATM.

Compare checking and savings accounts

Use the tab to narrow down top checking and savings accounts by fees, opening deposits and APY. Select Compare box on up to four providers to see features side by side.

1 - 5 of 26
Name Product Fee Minimum deposit to open Annual Percentage Yield (APY) Offer
SoFi Checking and Savings
Finder Score: 4.5 / 5: ★★★★★
Bonus
SoFi Checking and Savings
$0 per month
$0
4.60% on balances of $0+
0.50% on balances of $0+
1.20% on balances of $0+
Get up to $300 cash bonus with qualifying direct deposit. Terms apply. This offer is available until December 31, 2024.
Upgrade Rewards Checking Plus
Finder Score: 4.3 / 5: ★★★★★
Upgrade Rewards Checking Plus
$0 per month
$0
N/A
Cash Card by Cash App
Finder Score: 4.4 / 5: ★★★★★
Cash Card by Cash App
$0 per month
$0
N/A
Step Black Card
Finder Score: 4.3 / 5: ★★★★★
Step Black Card
From $0 per month
$0
5.00% on balances of $0 to $1,000,000
PNC Virtual Wallet with Performance Select
Finder Score: 3.4 / 5: ★★★★★
Bonus
PNC Virtual Wallet with Performance Select
$25 per month
(can be waived)
$0
0.01%
Earn $400 when you open a new PNC Virtual Wallet with Performance Select and establish a direct deposit of at least $5,000+ to your Spend account in the first 60 days.
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{"visibility":"visibilityTable","ctaLabel":"Calculate","tableCode":"savings_calculator_table","nicheCode":"USFSA","fields":[{"name":"PERIOD","value":"1","options":"","label":"Years to save","suffix":"","useSuffixAsPrefix":false,"useDropDownOption":false,"tooltip":""},{"name":"INITIAL_DEPOSIT","value":"1000","options":"","label":"Initial deposit","suffix":"$","useSuffixAsPrefix":true,"useDropDownOption":false,"tooltip":"Select Calculate to see your estimated total balance based on the current APY for each product below"}]}
1 - 6 of 29
Name Product Account type Annual Percentage Yield (APY) FDIC or NCUA insured amount Minimum balance to earn interest Minimum deposit to open Offer Estimated total balance
BrioDirect High-Yield Savings
Finder Score: 4.4 / 5: ★★★★★
BrioDirect High-Yield Savings
Traditional savings

5.30%

Up to $250,000
$25
$5,000
$1,053
Western Alliance HYSA through Raisin
Finder Score: 4.7 / 5: ★★★★★
Western Alliance HYSA through Raisin
Traditional savings

5.27%

Up to $250,000
$0
$1
$1,052.70
SoFi Checking and Savings
Finder Score: 4.6 / 5: ★★★★★
Bonus
SoFi Checking and Savings
Traditional savings,Checking

4.60%

0.50%

1.20%

Up to $250,000
$0
$0
Get up to $300 cash bonus with qualifying direct deposit. Terms apply. This offer is available until December 31, 2024.
$1,046
Barclays Online Savings
Finder Score: 4.3 / 5: ★★★★★
Barclays Online Savings
Traditional savings

4.35%

Up to $250,000
$0
$0
$1,043.50
Step Black Card
Finder Score: 4.3 / 5: ★★★★★
Step Black Card
Savings app

5.00%

Up to $1 million
$0
$0
$1,050
Bask Bank Interest Savings Account
Finder Score: 4.6 / 5: ★★★★★
Bask Bank Interest Savings Account
Traditional savings

5.10%

Up to $250,000
$0
$0
$1,051
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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 your financial bases.

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To make sure you get accurate and helpful information, this guide has been edited by Holly Jennings as part of our fact-checking process.
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Written by

Editor, Banking

Bethany Hickey is the banking editor and personal finance expert at Finder, specializing in banking, lending, insurance, and crypto. Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance, GOBankingRates, SuperMoney, AOL and Newsweek. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt. Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others. Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine. See full bio

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Bethany has written 392 Finder guides across topics including:
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Writer

Cassidy Horton is a freelance personal finance copywriter and past contributing writer for Finder. Her writing and banking expertise have been featured in Forbes Advisor, Money, The Balance, Money Under 30, Insure.com, and other top digital publishers. She holds a BS in public relations and an MBA from Georgia Southern University. See full bio

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