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What is the Difference between a Checking and Savings Account

Many people are unaware of the difference between checking and saving accounts. As a result, you could choose an account that you may not need. A checking account is what you'll use to deposit and withdraw money from your financial institution. You can also call it a transactional account for your day-to-day spending. It is easily accessible through electronic debits, ATMs, or checks. A checking account typically doesn't limit your deposits and allows you to make numerous withdrawals. There are four main types of checking accounts to choose from. 1. Checkless Checking As the name sounds, you can do all your transactions without paper checks. Instead, you can use online, mobile, or debit cards. 2. Rewards Checking This checking account lets you earn rewards for every purchase you make. It may provide cash back when you schedule direct deposits to pay bills and make purchases. Some financial institutions have rewards checking to earn interest from your funds. 3. Interest Checking If you want a guarantee to earn interest from your funds, an interest checking account is available. Competitive interest rates are offered depending on your maintaining balance. 4. Standard or Traditional Checking With this checking account, you can have a debit card to make purchases, write cheques, or pay bills. Generally, you'll be paying a maintenance fee if you can't maintain the bank’s required minimum balance. You also need to pay a minimum deposit when opening an account. A SAVINGS ACCOUNT is best for keeping your money to save for your future needs. It also allows you to enjoy compounding interest on your balance. Unlike a checking account, you can't write cheques using a savings account. The main benefit of opening a savings account is to enjoy higher interest rates. It's also a way to secure your fund for plans or goals like a down payment for a house, buying a car, or educational fund for your children. You may incur fees for frequent withdrawals with savings accounts. Is It Better to Have a Checking or a Savings Account? Now that you know how to identify a checking or a savings account, you can also gauge better what type is most suitable for your needs. For instance, go for a savings account to reach a financial goal. But if you'll need an account for your daily transactions, a checking account should be your priority. However, it may be better to have both accounts. One that lets you save and another for your unlimited financial transactions. The most important thing is to maintain control over your money through how you spend and how you save. Thank you for watching this CentShifter video and visit our website. Remember, you can start your financial journey at any time. Day one is all it takes.