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Checking Account vs Saving Accounts: Which is the best to have?

Thinking about opening a bank account? Do you want a checking account or a saving account? Don't know the difference? Come with us!

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by Thais Daou

Published on 09/13/2021

Checking Account or Saving Accounts: a comparison

A checking account or saving accounts, do you know the difference? Source: Unsplash
A checking account or saving accounts, do you know the difference? Source: Unsplash

Is your bank account a checking account or a saving account? As a matter of fact, do you know the difference between these two types of accounts, checking and saving? In case you do not, we are here to tell you the difference. Because not all accounts you hold at financial institutions are the same.

Actually, each type of account has a specific purpose attached to it. For example, checking and savings accounts function differently. In addition, when you understand how these accounts work, you can choose one that best meets your needs.

Although they both are used by thousands of people every day, many people still do not know how to recognize the differences between them. So, if you still do not understand this topic very well, this is what this article is for.

Read on and understand more about checking and savings accounts. Get to know their advantages and differences. Also, find out when to choose each of these options. See more below.

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Checking Account Saving Accounts 
SafetyA safe place to leave money, being protected by the Federal Deposit Insurance Corporation (FDIC).

For frauds, check the terms and conditions of your bank.
A safe place to save money, being protected by the Federal Deposit Insurance Corporation (FDIC), for bank accounts, and the National Credit Union Administration (NCUA), for credit union accounts.

AccessOnline and via mobile apps, including paying bills, balance inquiries, transferring, account alerts, and mobile check deposits).Online and via mobile apps, including paying bills, balance inquiries, transferring, account alerts, and mobile check deposits).
FeesThe best ones have none. It depends on the terms and conditions of your bank.

As it is possible to see, they have some features in common. See them below for more detail.

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Checking Account 

Checking account or saving accounts, which to choose? Source: Unsplash
Checking account or saving accounts, which to choose? Source: Unsplash

In general, a checking account exists for you to spend money. Checking accounts are a type of deposit account with the characteristic of meeting the demand for financial movement, providing the debits and credits of values owned by the client.

Their purpose is to receive amounts and provide channels for making payments, for example. One example is to place the account in automatic debit. Another, to ask for paper checks. And you can also make transfers, maintain investments linked to said account, among many other services.

Saving Accounts 

In general, a saving account exists for you to save money. Moreover, we are talking about money that you intend to use only in the future. The saving accounts are a type of account that is very well-known and used by people. They are easy to open and handle.

Their main characteristic is that they are a type of account that generates a remuneration for balances that remain deposited for a certain period. In this way, it encourages people to save. The remuneration is done on a frequent basis and refers to the balance that was deposited previously.

Benefits of Checking Account

On the one hand, the benefits of having a checking account include mainly the products that are offered together with the account. This is because this type of bank account offers products, such as debit cards and paper checks. Therefore, by having a checking account, it will be easier for you to make everyday purchases.

Benefits of Savings Account

Checking account or saving accounts, which is better? Source: Unsplash
Checking account or saving accounts, which is better? Source: Unsplash

On the other hand, the benefits of having a savings account include mainly the amount of money you will have in your account by the end of each month, compared to checking accounts.

This means that this type of account usually has interest rates that are higher than checking accounts. Therefore, by having a savings account, it will be easier for you to grow your money and grow it faster.

Disadvantages of a checking account

As for the disadvantage of this type of account, it is the opposite of the great benefit of having a savings account. Contrary to savings accounts, checking accounts end up paying little or even zero interest rates. Therefore, we advise you to stash your reserves in a savings account, where your money can grow.

Disadvantages of a savings account

As for the disadvantage of this type of account, in case you use it as you would use a checking account, like transferring or withdrawing money, they may charge you for that. So, you cannot do it frequently. Because the purpose of these accounts is not daily spending.

As a matter of fact, these money movements used to have limits enforced by the government. But the Federal Deposit Insurance Corporation, or FDIC, changed this. As from the first half of 2020, this enforcement stopped existing. But just because banks do not have this obligation anymore, it does not mean they will stop doing so. So, it is best that you talk to your bank regarding this.

Is it better to have a Checking Account or Saving Accounts?

Is it better to have a checking account or a savings account? What do you think? Actually, a better question is: would you like to enjoy the benefits of watching your money grow? And how about the benefits of having your credit card, your debit card, paper checks, as well as being able to transfer and withdraw money?

Then, we suggest you this: maybe you can have both. Yes! By doing opening a checking account and also a savings account, you will be able to enjoy different features for your different needs.

To conclude, you can find checking accounts that charge no fees. Also, you can find good ones that offer free access to nationwide ATM networks. If you look deep, you may even find some with a welcome bonus. So, do look at a number of them and find the best conditions.

Lastly, you can find savings accounts that present high-interest rates, as well as zero fees. Not to mention easy online transfers. Do some leg work and find some great options. Then, enjoy the best of both worlds.

Enjoyed our content? Then keep reading us, and improve your financial life.

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About the author

Thais Daou

Thais Daou holds an undergraduate degree in Languages — Translating and Interpreting from the São Judas Tadeu University. She has been translating, proofreading, and transcribing financial documents, as well as documents from other fields, for five years. And now she begins a new chapter in her career, writing about financial solutions in a simplified way, with a desire to spread this knowledge, which is so important.

Reviewed by

Aline Barbosa

Senior Editor

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