Checking vs. Savings Account

Signing a Check

You know you need a bank account to handle deposits and pay bills, but are you better with a checking account, savings account, or one of each? The answer to that depends on how you keep track of your money and what your plans are for the future. Compare checking vs. savings accounts below to learn more.

What is a Checking Account?

A checking account is what is known as a transactional account — meaning the bank expects you to use the money in it and places few restrictions on how and when you do that. Modern checking accounts let you access your money electronically, as well as via check, debit card, payment services, and mobile apps, like Apple Pay. Many banks also allow you to deposit checks with your phone, eliminating the need to drop into the branch unless you need to deposit cash into your account.

Select checking accounts even offer customers interest on their money if they maintain a certain monthly balance. This bonus can be convenient if you want to pocket a little cash every month and helps to avoid overdraft fees from insufficient funds as well. While an interest-bearing checking account might seem like an excellent alternative to a savings account, there are many reasons why separate accounts are in your best interest.

What is a Savings Account?

A savings account is an interest-bearing account that allows you to earn money when you maintain or grow your monthly balance. Some banks allow customers to set up multiple accounts to allow them to save for emergencies, put a little aside for retirement, and even save for a significant purchase or vacation getaway without confusing one account balance for another.

Many banks connect your primary savings and checking together to make depositing money simple and to offer overdraft protection for your checking account. That way, if you accidentally spend more than you have in checking and you don’t have overdraft insurance, your bank can transfer the money automatically, saving you penalties and fees for which you may not be eligible for a refund.

Get Funding Assistance Today at Xpress Cash

Now that you know the answer to the question, “What is a checking account vs. savings account,” you can make an informed decision for your finances. If your current checking and/or savings accounts are a bit light and you need help with emergency expenses, stop by one of our Michigan, Idaho, or Wisconsin branches and speak to a lending agent today.