If your checking and savings accounts are connected, you can access your online banking to view the balances of both accounts. While, you can send and receive money via wire transfers, bill payments, paycheck deposits, and other electronic deposits using the routing and account numbers on both accounts. Most users of either platform usually ask, which is better checking vs. savings accounts.
However, there are a few further distinctions between a checking and a savings account. Checking accounts are primarily used to make purchases, while the number of withdrawals from savings accounts each month is capped by federal law.
What is a Checking Account?
A checking account, as the name suggests, is typically used for making payments. Paper checks have traditionally been the most popular method of payment, but today you can also use electronic wire transfers or a debit card that is linked to the account to make payments. (Paper checks are still available; however, there may be a fee.)
With a checking account, you can deposit funds and keep them safe while still using them to pay for regular costs. The money is normally taken out of your checking account when you use your debit card at a store. When you use checks, your checking account will typically also be debited for the amount.
Benefits of a Checking Account
Below are some of the advantages of using checking acconts;
- Up to the insurance limitations, deposits are FDIC insured.
- Money availability via checks, an ATM, a teller, and cashback at a register
- As long as your account is in good standing, there are no transaction limits.
- Access to Bill Pay with our mobile app and the Internet
- Online availability of transaction history and statements
- access to online financial management tools
- Ability to use Zelle On-demand to send money to friends and family.
- Access to your account balance online, using a mobile app, at an ATM, and through SMS alerts.
What is Savings Account
When you want to put money down for the future, opening a savings account is a wise decision. Daily access is not as possible as it is with a checking account because regulations only allow six transfers on a savings account every month or statement cycle. Huntington pays interest on all savings accounts.
Savings accounts are for keeping money safe that you don’t immediately plan to spend; checking accounts are for spending. Only six withdrawals or transactions from a consumer’s savings account may be made each month, according to federally controlled rules.
Benefits of a Savings Account
- FDIC-insured deposits are covered up to insurance limits.
- To increase your own wealth, you can earn interest.
- Access to funds is restricted (6 transactions each month/statement cycle).
- Online availability of transaction history and statements
- access to tools for managing finances online and in the home
- Online, using a mobile app, at an ATM, and via SMS alerts: instant access to your account balance.
Difference Between Checking and Savings Accounts?
Interest rates and money availability are the key distinctions between checking and savings accounts. You may regularly access your money quickly with checking accounts, some of which pay interest. Savings accounts often serve a specific financial objective or use (such as a trip or house renovation) and have withdrawal restrictions as well as the ability to earn interest.
Frequently Asked Questions (FAQs)
What Do You Need to Open a Checking or Savings Account?
Before opening a bank account of any kind, whether it be a checking or savings account, there are a few requirements you must meet. The reason for this is because the banking institution needs to confirm your identity. In other words, you’ll require a legitimate piece of government-issued identity, such as a passport or driver’s license, as well as your address’s documentation or your Social Security number.
Financial Consumer Protection Bureau. Is a Social Security number Required to Open a Checking Account? You will also need to bring the required deposit if your bank has one.
Checking vs. Savings Accounts: Which Is Better?
When comparing checking and savings accounts, you might discover that one is more suitable for your needs than the other, and in some circumstances, you might profit most from utilizing both.
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