Are Savings Accounts Better Than Checking Accounts? Find Out Here!
When you are opening a new bank account the first thing you need to decide is whether you need a good checking account or a savings account. Both the options are quite popular and equally efficient in holding your money at a safe spot.
The difference between a checking account and a savings account is how both of them are used. For example, checking accounts are more useful when you have to frequently make payments using the cash you have there. On the other hand, savings accounts, as the name suggests, are meant for money that you don’t have to use right away.
But, is that all? Nope!
There are many other differences between these two types of accounts and we will look at them below is a simple, easy way.
Checking Accounts Are Meant For Frequent Transactions
Checking accounts help you transfer and receive money quickly. It shouldn’t come as a surprise then that most of its features revolve around this primary task of the account.
For example, almost all checking accounts support automatic electronic payments, debit card payments, online bill payments using your bank account, free ATM withdrawal, and unlimited paper checks.
Moreover, the majority of the checking accounts do not offer interest on the amount that you keep there. For those of them that do, you have to keep a substantial amount in the bank to earn significant interest. Some banks that offer a good amount of interest often come with strict terms of application and use such as using a debit card 12 times per month or keeping a minimum deposit in your account at all times, etc.
Checking accounts come with a variety of fees that you have to take into consideration before opening one. One of the most obvious charges is that of monthly maintenance. This can vary from one bank to another but it is typically charged every month and can be a lot to deal with. Other than that, you will have to pay overdraft fees and insufficient funds fees as well. The only way to avoid these charges is to look for a true, free checking account.
Savings Accounts Help To Keep Your Money Safe
The idea of a savings account was to offer a spot where your money can be stored for a long-term. It is the best option when you have to put away cash that you will not be needing any time soon.
Online checking account, savings accounts can help you earn a considerable amount of interest on your balance so you can earn money using the cash that you are not using. These are also an amazing option for when you are planning to save enough for rainy days. Since a savings account makes it difficult to withdraw money all the time, it will be likely to stop you from overspending.
Typically, savings accounts allow you to make only 6 withdrawals per month so you have to be thoughtful when doing so. Nonetheless, there are some types of transactions that are free. You can make no-charge transactions to a checking account which is pretty quick if both types of accounts are present in the same bank. Unlimited cash withdrawals and checks are allowed as well.
One last important consideration is that savings accounts are cheaper than checking accounts. If you compare the entire fee schedule, you would realize that savings accounts come with fewer charges which makes them an ideal choice when you are on budget-saving mode.
Whether you choose a savings account or a checking account entirely depends on what you need. If you want to make frequent transactions on easy terms then checking accounts are definitely what you should go for. On the other hand, savings accounts are meant for cash you want to stack away for rainy days. Since both types of these accounts serve different purposes, there is nothing stopping you from opening both of them if needed,
Moreover, if you are still confused about the final choice you can always get in touch with a customer support team offered by different banks and get to know about the view of their professionals on which account you should open. They have more expertise in these fields and can guide you better considering your needs and requirements.