Checking accounts and savings accounts are the most commonly used accounts. Yes, they might sound similar, but they are not! Let’s break down the key differences.
Checking Account: Your Wallet for Everyday Spending
Checking accounts are primarily for daily living. For a day to day use and paying bills, money comes and goes through the checking account. Access this money through the use of a debit card, check, or even online payment methods. Convenience is the name of the game with checking accounts. However, most checking accounts have a minimal amount of interest. So, your money is liquid but won’t be growing by simply sitting there. You can think of a checking account like a wallet. It’s where you put the money you need right now.
Savings Account: The Healthy Place for Your Money to Grow
A savings account is always there for the purpose of helping long-term deposits. It is very convenient as an opportunity to save up in case of emergencies, or savings, just for some specific goals, such as a vacation, some big purchase, or future events. Most savings accounts earn interest, which means money will be multiplied over time. Of course, not high interest rates that would make you rich overnight, but every little bit counts! One can not access savings accounts like checking accounts. Many banks also limit the amount you might withdraw from such an account in a month—this way you are induced to leave the money there and allow it to grow.
Bottom Line
When it comes to checking account vs savings account, use both accounts to help in the management of money. A checking account would be for everyday needs, and a savings account would allow your money to grow and eventually reach future goals. Together, they will keep your finances organized and secure!
