whats the difference between a checking account and a savings account?

Question

im 18 years old
i want to have money saved away
for when i need it say my car breaks down,
need a couple bucks cuz im struggling a pay check, you know stuff like that just want to have some money aside where i wont touch unless i need it,

i also am with little caesars and they offer
direct deposit through comerica, so i want to get that also, would that be in checking or savings, im guessing checking...

what are usually the minumum you
have to keep in there to keep the account open

i want to have some idea before
i go into the bank not knowing anything

thanks

Answer 1

A savings account is exactly what it sounds like - an account that's primarily used to tuck money away.

A checking account is an account that you can pay bills from (either electronically, by check, or by ATM/debit card).

Some financial institutions will waive monthly account fees if you sign up for direct deposit or an electronic account. BTW - electronic account means that you don't write any checks, all of your transactions are either by ATM/debit card or electronically presented to your checking account.

Monthly fees can range anywhere from $0 to $25 a month, depending on the type of checking account you get.

Minimum account balance requirements vary. They could be anywhere from $5 -$100.

Before you decide where to open your accounts at, please ask 3 different financial institutions what their requirements are regarding savings and checking accounts. Also, be sure that you understand what the monthly fees would be and see if there are ways to have them waived.

Good luck and I wish you much financial success!

Answer 2

Well, there are all sorts of checking and savings accounts....but I'll try to give you a general feel...at least for the way I manage my finances...

Checking is the "operating account". Pay your bills from here. Do direct deposit to here (or at least the majority of it). Take out your ATM funds from here. Normally, you earn very little interest on this money if any at all. For my bank, you do not earn interest with a regular checking account, but if you promise to keep a minimum balance (say $1000 or whatever) they will give you a small interest rate. I've found that to be piddly.

Savings is just that....savings. Put in and try not to touch it. You could put a certain portion of your direct deposit here (the portion you don't want to spend unless it is an emergency). The interest rates are higher and the higher your balance, usually the better your rate (i.e. the better type of savings account you can open).

Answer 3

I think the requirements vary from bank to bank but many accounts don't require you to have any minimum balance. I think the main differences are with checking you get checks/debit card (so it's easier to get the money out) and with savings you earn interest on the money you have in there. I'm no expert, but that's what my experience has been. Don't be afraid to go into the bank not knowing anything. They explain it all to people all the time. One tip -- a lot of times local community banks are easier to deal with and have better customer service than some of the huge chains. Though they may not offer as many perks and conveniences (ATMs, online banking, etc.)

Answer 4

I'm sure your parents are your best source of information. Usually checking accounts are opened with a minimum of $100. If you can split your direct deposit so part goes into checking and part into savings, then that's a good thing. If you're still living at home and have no real expenses, then put all your money into a savings account.

Answer 5

You can have direct deposit put into savings or checking accts. I have direct deposit and I put money into both checking and savings. A lot depends on where you do your banking at. See what they offer. Do they offfer debit cards? A lot of banks differ on the amount you have to have to keep your account open. My bank you have to keep a minium of 50.00 in 1 acct or another. See if your banks restricts the number of checks you can write per month , some do some dont. hope this helps