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Checking and savings account - What is the difference?

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Checking and savings account - What is the difference? Do I need to have both?




Hey,

You can use checking accounts to meet regular expenses and urgent money needs such as bill payment. You'll also be able to make direct paycheck deposit, other payments deposits, and fund transfer by using your checking account. But you must remember that most checking accounts don't generate interest.

Whereas, you can use a savings account to generate good interest on your saved funds. A saving account may also serve certificates of deposit (CDs) and investments. On a saving account, the interest rates can be calculated on a daily, monthly, or annual basis.

Yes, by using both the accounts you can earn more interest (shift bigger amount to saving account), save more easily (separate daily expenses into checking account only), and can protect yourself from costly overdraft fees (automated backing up the checking account with your savings account). However, overdraft protection may cost you $34 per transaction, in case you make any overdraft from your checking account, as per CFPB.

Sub: #1 posted on Wed, 08/03/2016 - 01:24

tiarajoseph11 tiarajoseph11

(Posts: 129 | Credits: 25.26)

In case of a checking account, usually, you have to pay a fee if you don’t have a specific balance, or for covering an overdraft. Fees are also attached to using ATM of another bank. However, these things might vary from one bank to another. But, depositing money and withdrawing is encouraged for this type of account.
Savings accounts are more like one kind of investment. You get interest on the amount you keep.

Sub: #2 posted on Wed, 08/03/2016 - 04:11

Good Nelly Good Nelly
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