Difference Between Savings Account and Checking Account

it is important to know the difference between these two banking services

When applying for an account in the bank, you are given several options. Each bank has a different set of offerings to give, but the constant selections are the savings and checking accounts. Here, we will discuss the differences between a savings account and a checking account.

Savings Account

A savings account is more of an investment account rather than one for everyday transactions. It is designed to save your money and help you earn interest. Thus, savings accounts typically have more restrictions when it comes to withdrawing cash. Savings accounts typically don’t have check-writing privileges or an attached debit card, but these can vary per bank. Savings accounts generally charge little to no fees.

Checking Account

A checking account is a transaction account that allows account holders to frequently withdraw money with fewer restrictions. These accounts generally allow making payments/transactions with checkbooks, mobile applications, and debit cards. Because there is faster turnover for money in checking accounts, they typically have higher fees than savings accounts. Most checking accounts do not pay interest to account holders.

	Savings Account	Checking Account
Definition	An account made to save money; typically earns more interest than a checking account	An account tailored for everyday transactions
Withdrawals	Limits number of withdrawals a month and a maximum amount per day	Generally no restrictions
Interest	With interest	None
Fees Incurred	Varies by the bank, generally lower than checking accounts	Varies by the bank, generally higher than savings accounts
Application	Risk-free money saving	Regular transactions
Minimum balance	Depends on the bank	Depends on the bank
Accessibility	In most cases, holder must transfer money to checking account in order to use it	Anytime
Transaction methods	Online transactions, bank withdrawal, sometimes debit card	Debit card, online transactions, checks, overdrafts

Venn Diagram