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Savings Account vs. Checking Account: What’s the Difference?

Lendstart Updated: June 26, 2023 • 5 min read
Saving and checking account

While checking accounts are commonly used to manage day-to-day spending, savings accounts are primarily intended for saving and growing your money for the longer term. These two types of accounts are the foundation of personal finance, so let's delve in and understand them more deeply.

With a better understanding of savings and checking, you’ll be more empowered to make educated financial decisions and manage your money like a pro.

What is a Savings Account?

A savings account is an account you can use to save money and, typically, earn interest over time as well. 

Some accounts allow you to deposit funds into the account while limiting your withdrawals for a time. This can help you save money more regularly because it can deter you from impulsive spending.

The primary purpose of having a savings account is to put away money for future financial objectives such as:

  • Buying a house
  • Purchasing a car
  • Going on vacation
  • Paying for college or other education expenses
  • Retirement

Having easy access to your savings can help reduce stress in times of unexpected financial need and give peace of mind knowing there are funds available to cover these and any emergency costs.

What is a Checking Account?

In contrast, a checking account generally provides quicker access to your money than a savings account. You can use this account for day-to-day spending, such as groceries or bills.

Checking accounts also tend to have lower transfer or withdrawal fees because they are designed for frequent transactions and transfers. Many people use checking accounts for daily expenses and savings accounts to store money for long-term goals.

Still, some people ask, “Do checking accounts have interest?” and the answer is sometimes. Many checking accounts come with an interest rate, though they are typically much lower than what you would get from a savings account. 

(Get the low-down on the best online checking accounts next).

The Main Differences Between Checking and Savings Accounts

There are many differences between these two types of foundational bank accounts. Learning about these can help you make more educated financial decisions.

Key Features

Checking Account

Savings Account


Convenient for daily expenses

Helps save and earn interest

Purpose and usage

Regular transactions

Long-term savings

Access and liquidity

Easily accessible funds

Limited withdrawals, less liquid

Interest rates

Generally lower or none

Higher interest rates


Usually does not apply

Usually applies

Keep in mind, specific account terms and conditions can vary between different financial institutions.

Find out how to open a bank account online.

How to Choose Between a Savings Account vs Checking Account

Should you open a savings account or a checking account? Ultimately, it depends on your financial goals, objectives, spending habits, and personal preferences.

Here are some factors to consider when making your decision between a savings account vs. checking account:

  • Purpose of the account: Determine if your goal is to save money over time and earn interest, or, to manage your day-to-day finances. If it's the latter, a checking account is what you're looking for.
  • Accessibility of funds: If you're comfortable limiting your spending and making fewer withdrawals, a savings account is likely appropriate. If you need regular access to your funds, use a checking account.
  • Fees and requirements: In general, interest rates for savings accounts are higher than those for checking accounts. That's because savings accounts are designed to help your money grow while the main purpose of a checking account is to provide quicker access to funds.

 Reviewing the details provided by your bank or credit union before opening an account is always a good idea.

Evaluating Fees and Account Requirements

When getting ready to open a bank account, whether checking or savings, it's essential to consider fees and any account requirements.

  • Savings accounts: Typical fees and minimum account requirements for regular savings accounts vary among banks. Some banks may have no monthly maintenance fees and require a low minimum deposit, while others may have monthly fees and higher minimum deposit requirements. 
  • Checking accounts: Many banks offer checking accounts with no monthly maintenance fees and low or no minimum deposit requirements. However, some banks may have monthly fees if certain conditions aren't met, and a few may require higher minimum deposits. 

It's always advisable to compare different banks to find a checking account that aligns with your needs and preferences.

Combining Both Accounts for Optimal Financial Management

Combining a savings account and a checking account can make managing your personal finances much easier.

Establish an emergency fund in a savings account for unexpected expenses. Then, use a checking account for day-to-day expenses, budgeting, and bill payments.

Set up separate savings accounts for specific goals like a down payment for a house or vacation, transferring funds regularly from the checking account. For example, deposit your paycheck into your checking account, allocate funds for bills and expenses, and automate transfers to savings accounts. Regularly review and adjust your accounts and budget on an ongoing basis.

Many checking accounts come with an interest rate, though they are typically much lower than what you would get from a savings account.

Conclusion: Savings vs. Checking Account

Ultimately, choosing the optimal type of account for your needs means understanding all the features associated with each option. Make sure to research thoroughly before making any decisions so you can find an account that meets your needs while also helping you reach your financial goals – whatever they may be!

With the right combination of accounts, you’ll be ready to start managing your finances with ease. And, of course, Lendstart is here to help too. Browse our site for all the information you need to make informed, confident financial decisions.


1. Is it better to have a checking or a savings account?

Both checking and savings accounts serve different purposes. It's generally beneficial to have both. Checking for daily transactions and bill payments, savings for long-term goals and emergency funds.

2. Is money safer in checking or savings?

Money is generally safer in a savings account. Savings accounts are FDIC insured, providing protection up to $250,000 per depositor, per bank. Checking accounts have some protection, but savings offer an extra layer of security.

3. How much money should you keep in savings?

Aim to keep 3-6 months' worth of living expenses in savings for emergencies. Start by setting achievable goals, then gradually increase savings to cover larger expenses or unexpected situations.

4. Can banks seize your money if the economy fails?

It's highly unlikely that banks will seize your money if the economy fails. The FDIC ensures deposits up to $250,000 per depositor, per bank. Even if a bank fails, you'll still have access to your insured funds.

Lendstart aims to simplify complicated topics in the personal finance field. Gain insight from our thought leaders, seasoned industry experts, who strive to provide timely and practical information on current market trends.