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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 0.46%
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 0.46%, 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.

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 June 30, 2024.
Earn up to 4.60% APY on savings by meeting deposit requirements, and 0.50% APY on checking balances. Members without deposit requirements will earn 0.50% APY on both savings and checking balances. Turn on automatic savings or use the Roundups feature to help you reach your savings goals faster. Get up to $2M of additional FDIC insurance through a network of participating banks.
Upgrade Rewards Checking Plus
Finder Score: 4.3 / 5: ★★★★★
Upgrade Rewards Checking Plus
$0 per month
$0
N/A
Earn up to 2% cashback rewards on everyday purchases. Pay $0 fees for overdraft, domestic wire transfer and monthly maintenance. Member FDIC.
Cash Card by Cash App
Finder Score: 4.4 / 5: ★★★★★
Cash Card by Cash App
$0 per month
$0
N/A
The Cash App Cash Card lets you pay for goods and services both online and in stores using your Cash App balance. Enjoy features like ATM access, direct deposit, instant discounts at select stores and a customizable card.
Axos Bank Rewards Checking
Finder Score: 4.2 / 5: ★★★★★
Bonus
Axos Bank Rewards Checking
$0 per month
$0
3.30% on balances of $0 to $50,000
Use promo code AXOS300 and apply by June 30th, 2024, to earn up to $300 bonus, $50 each month you meet requirements: Make direct deposits of $5,000+ each month for the first 7 months and maintain an average balance of $7,000.
Earn up to 3.3% APY after meeting rate requirements. Get ATM free reimbursements at all domestic ATMs. Pay $0 monthly or overdraft fees. FDIC insured.
Chime® Checking Account
Finder Score: 4.8 / 5: ★★★★★
Chime® Checking Account
$0 per month
$0
N/A
Save easily and access your paycheck up to 2 days early with direct deposit. Pay $0 monthly fees, and no minimum balance is required. Access 24/7 support and get daily balance and transaction alerts. FDIC insured.
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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
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 June 30, 2024.
$1,046
Barclays Online Savings
Finder Score: 4.3 / 5: ★★★★★
Bonus
Barclays Online Savings
Traditional savings

4.35%

Up to $250,000
$0
$0
Get a $200 bonus when you open a new savings account, deposit $25,000 within 30 days of opening and maintain the balance for 120 days. Terms apply
$1,043.50
Cash App Savings
Finder Score: 4.4 / 5: ★★★★★
Cash App Savings
Savings app

4.50%

1.50%

Up to $250,000
$0
$1
$1,045
Customers Bank High Yield Savings through Raisin
Finder Score: 4.6 / 5: ★★★★★
Customers Bank High Yield Savings through Raisin
Traditional savings

5.11%

Up to $250,000
$0
$1
$1,051.10
UFB Secure Savings
Finder Score: 4.7 / 5: ★★★★★
UFB Secure Savings
Traditional savings,Custodial account

5.25%

Up to $250,000
$0
$0
$1,052.50
Wealthfront Cash Account
Finder Score: 4.6 / 5: ★★★★★
Wealthfront Cash Account
Cash management account

5.00%

Up to $8M FDIC insurance
$1
$1
$1,050
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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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