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Checking Account Vs Savings Account: Difference And How To Choose

Checking account vs savings account is a line we resort to, in other to clear your confusions regarding these duo. We have different reasons that prompt us to open accounts. Factors like ease of access, necessity, purpose and many other factors not mentioned.

Just like every other bank account, Checking and savings account both hold money for safekeeping. But they have different features, and it’s essential to understand the differences between these accounts and when to use them.

When you are done reading this post, i assure you that you will understand the crystal difference.

Checking Account Vs Savings Account at a glance

Checking AccountSavings Account
Easy transfers to pay online bills.Linked to checking, so you can transfer money between accounts.
Debit cards takes funds directly from your account.You have limited access, so no room for impulse buying.
May provides options to order checks.May require funds moved to checking in order to make withdrawals.
Access to funds is quite easy.Basically for long term savings.
Withdrawals via ATM’s may be caped at a certain amount.Offers higher interests
Best for money you plan to spend soon.Good for money you don’t need right away.

Checking Account

What is checking account?

A checking account is a type of bank account that is used for everyday transactions. Banking activities such as purchases, bill payments and ATM withdrawals, is majorly carried out here. This type of account literally earn little or no interest. It is the most basic account that banks, credit unions, and small lenders offer.

In other definitions, a checking account is simply accounts you can write checks from. Easy to go cash where you can have access to your funds any time you need them. Particularly designed for frequent transactions.

What are the varieties of ways money can be used in checking accounts?

Online bill payments

You can send payments from your checking account on demand to your biller, who deducts directly from your account. All that is required is log in to your account and set up a payment, and your bank will mail a check or send the funds electronically.

Paper checks

This is simply the common check book used to make swift withdrawals from your account. Although they’re not as popular as they used to be, but its still in play nowadays.

Automatic electronic payments

This feature automatically deducts funds from your account, in order to settle your bills. If you pay regular bills, you can have funds deducted from your checking account automatically each month, eliminating the need to manually pay bills. This process is done by providing your checking account details to anybody you want to pay.

Debit card payments

A debit card allows you to spend from your checking account balance easily. You can swipe the card for in-person purchases or enter your card information for online payments.

Are there fees/charges associated with checking accounts?

That’s a big yes. This is one of the shortcomings associated with a checking account. Below we will explain some various charges to expect while using this account.

Monthly maintenance charges

Flat-dollar fees that come out of your balance every month. It’s hard to imagine a situation where it makes sense to pay those fees.


Overdraft charges

Transaction fees for spending more than you have in your account. The bank might “lend” you money or allow payments to go through even when your account is empty. You need to repay those amounts, and you’ll typically pay additional overdraft charges.


Insufficient funds fees

Similar to overdraft charges, but those might hit your account even when the bank doesn’t cover payments for you. If you try to spend more than you have, an insufficient funds fee may apply.


Additional fees

You may have to pay ATM charges for using certain ATMs, although some banks rebate those fees. What’s more, some banks charge for requests like wire transfers, replacement debit cards, and stop-payment requests.

Are there ways to use a checking account without charges?

Checking accounts are known for charging fees, though you can opt for a free checking account that free of charges. If you so wish to run your checking account without charges, their are two ways to achieve that:

1. Find a truly free checking account

check with local banks and credit unions, which may not have monthly maintenance charges. Some online banks also provide free checking.

2. Qualify for waivers on fees

At most banks, you can avoid fees by meeting certain criteria. For example, if you set up direct deposit into your account (from employer), you may be able to bank fee-free.

Savings Account

What is a savings account?

A savings account is basically an account you stash funds that you are not ready to use yet, often with the goal of accumulating more. It is where people keep money which they don’t need to use right away. Unlike a checking account that does not usually yield interest over time, a savings account helps individuals to grow their money, whether they need to access their cash or not.

What are the main purpose of a savings account?

Below are the two main purpose of a savings account.

To grow funds overtime

Savings accounts pays you interest, so this enable you make some extra cash on fund you actually has no use for at the time. Compare that to checking accounts, which usually do not pay interest but rather you are charged certain fees to maintain the account.

Separate long-term money

If you’re saving for a rainy day or other financial goals, savings accounts can help. By removing funds from your checking account, you’re less likely to overspend. It can even make sense to use multiple savings accounts for various goals.

How do i access my funds in a savings account?

Cash withdrawals

If you need to use cash and your bank provides an ATM card, you can get cash out of your savings account at an ATM. Likewise, you can visit a bank branch and request for cash directly. You can withdraw funds with an ATM or bank teller as often as you want.

Request a check payable to you

Banks can also print checks payable to you. You can then deposit those checks at a different bank or credit union. There is no limit to the number of checks you receive when the checks are payable to you.

Transfer to a checking account

You can move money from your savings account to a checking account when you plan to spend. That’s almost instant if both accounts are at the same bank, and it typically takes a few days to move money from one bank to another.

Are there fees/charges associated with checking accounts?

In comparison with a checking account, its relatively low and most due to usage of an ATM card. Monthly fees are not very common. I strongly recommend you go through the banks fee schedules before opening an account.

Final Remark

The Checking Account Vs Savings Account is a clear review on both accounts to help you make better decisions. I believe you now know the clear difference, benefits and functions of both accounts in contrast.

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Written by Kingsley Igwe

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