What's the difference between a savings account and checkings?

Question

What can you do with checking that you can't with savings and vice versa?

Answer 1

You need a checking account to write checks on to pay your bills. You need a savings account to put away funds for your future. The checking account will pay little or no interest on the funds you leave in it. The savings account will pay a better interest rate of the funds in it. You should have both kinds of accounts. Use the checking account to pay bills. Use the savings account to begin your pursuit of economic independence. Try to put away ten percent of your take-home pay into the savings account. Also,try to put away all weird little monies you get such as a rebate on a purchase or Christmas gift check from a relative into your savings account. Over time you will probably exchange the savings account with a money market account...and likely branch out to certificates of deposit and mutual funds as you increase the balance in the money market account.

Answer 2

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Answer 3

A checking account is simply a vehicle by which you can have easy access to your money without having to depend on cash. You are given account access with checks, debit cards, atm cards and ACH transactions.

A check is a draft that you can give to a person or a company which they give to their bank in order to transfer funds from your account to theirs. Checks also give you proof that you paid an item, where as cash leave no proof.

An ATM card allows you to withrdaw cash at ATM machines and point of sale terminals such as stores. A pin is required for this transaction is usually capped to a daily day limit regardless of what you have in your account.

A Debit card has a Master Card or Visa logo and allows you to purchase items with any merchant who accepts these credit cards as well functioning as an ATM card. This card allows you to make reservations for hotels, airlines and car rentals as well as purchase items over the web. It provides you with the same benefits and securities that Master Card provides you via your credit card (ie travel protection and vehicle insurance on rentals). Your spending limit is higher but is still subject to what you have available on your account.

An ACH transaction is an electronic payment or deposit that is made into this account. You usually set up once and is meant for a reoccuring transaction, such as direct deposit for your pay check or a car payment.

Savings accounts are meant to be a savings vehicle so while it provides you with the convenience of being able to accept ACH's they are usually limited. Also, you can never have a debit card on a Savings only ATM.

Both savings and checking accounts pay interest but savings usually pay a little better.

Other accounts to consider are money market accounts which is a combination of both. A savings account that pays higher interest but also give you check access. Money Markets are usually limited to only three checks per month by law.

Hope this helps...

Answer 4

A checking account pays no interest (or very little) on your deposits. You get a checkbook to write checks to pay bills or whatever.

A savings account is meant to be for longer range goals, no checks are involved, and usually pays some interest.

Answer 5

Yes there is a difference. A savings account let you save money with intrest and a checking account allows you to spend your money , but with a daily limit...

Answer 6

For checking, I believe you can use checks. On saving, you can't use checks. It is designed for savings only.

I believe the service charge is more expensive for a checking account.

Answer 7

This question is worth people's attention