Checking vs. Savings Accounts – Which is Best for Me?

 

If you are new to banking, you may be confused about which account is right for you: check or savings? Do you need to open a checking account to access a debit card? Or, open a savings account to avail interest? Do you really need both? Learn more about the differences between checking and saving accounts. Discover how both accounts can benefit you.

 

Saving Account:

 

Whether you are focused on buying your first home or want to build a safety net when the unexpected happens, you will need a savings account at some point in your life.

 

A savings account is a great place to keep cash that you don't plan to spend right away because it keeps your money safe and pays you little interest.

 

A savings account means you access your routine needs and wants. It saves a significant portion of your earnings. It is offered by most banking institutions and comes with various features. Considering the benefits, relevance and importance of savings accounts in your daily life, choosing the right account can give you the expected benefits.

 

Savings accounts are designed to give you a safe place to store and grow your money until you are ready to use it. They are popular options for achieving short-term and long-term economic goals, and nowadays, Americans prefer savings. In fact, the value of personal savings in the US reached $ 1.05 trillion in 2018, up from $ 384.4 billion a year earlier.

 

If you are looking for the best savings account and some tips to make the right decision for you, here is what to consider.

 

Tips for finding the best savings account:

 

1.   Fees:

 

Check if there is a monthly maintenance charge on your account. If so, see if you can forgive it. Get a copy of the account fee schedule and see what your bank can charge you. Before applying for an account, make sure you are comfortable with it.

 

2.   APY:

 

Higher interest rates mean more money for you. So this is the most important feature to keep in mind when comparing your options. But don't dwell on which account offers the best rates. Banks can change their rates at any time, so what is currently the highest rate account could be in the middle of the pack in a few months. Just focus on choosing the rate closest to the best available rate.

 

3.   Convenience:

 

Nowadays both brick and mortar and online banks offer online and mobile banking tools. But some may be more user-friendly than others. You can also get personal support on brick-and-mortar banks if you need to, which some people prefer.

 

4.   Other Accounts:

 

If you want to do all your banking in one place, look at the other bank accounts available in the financial institution of your choice. This includes checking accounts, loans and credit cards. Some banks also offer additional benefits to customers who open more than one account, so if you are on the fence it can help influence your decision.

 

Checking Account:

 

Checking accounts conveniently provide a safe place to deposit and withdraw money, but choosing from a huge number of options can be difficult. A checking account is a tool for saving the money you want to spend. This is different from a savings account, which you use to withdraw money for the future.

 

Online banks, brick-and-mortar banks and credit unions all offer checking accounts that come with a variety of features. Checking accounts can lead to higher than average interest rates, no monthly maintenance charges, reimbursement of ATM charges and / or other benefits.

 

Checking accounts are transactional (meaning they process incoming deposits and payments), with many having a monthly fee of up to 20. However, these costs are waived if you meet one or more of your bank's requirements.

 

All of these benefits can make the most of your money, but you need to do some research to find the right account for you. You compare different accounts and narrow down your top options.

 

Tips for finding the best Checking account:

 

1.   Fees

 

Many banks charge maintenance and other fees to check account holders. The last thing you want to do is to let the bank keep your money.

 

ATM fees and overdraft fees are other fees to look at. Your best bet is to consider accounts that do not charge a fee for using other bank ATMs, or better yet, refund the fees charged by other banks.

 

2.   Insurance:

 

One of the benefits of keeping money in a checking account is that it keeps your money safe. If you lose your wallet with your debit card, for example, you can cancel the card and lose the cash in your wallet.

 

3.  Interest Rate:

 

With a checking account, earning interest on your money is not the primary concern, but it is still a great benefit.

 

Many banks do not pay interest on checking deposits, retaining interest payments for savings accounts. However, there are some banks, especially online banks, that will pay interest on account checks.

 

4.   Online and mobile experience:

 

Online and mobile banking is more popular than ever. And it's easy to understand why. The 24/7 convenience of paying your bills, depositing, checking your balance, transferring money to accounts or sending cash to your friends from your phone is hard to overcome.

 

Bottom Line:

 

There are many similarities between checking accounts and checking accounts, but they are for two different purposes. Before you sign up for a savings or checking account, double-check the monthly fee (and the way to forgive it) and look for high-APY options that will help you make more money over time.