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

Edited by Harlon Moss || By Janet White || Published on November 30, 2023
A Savings Account is designed for depositing money to earn interest over time. A Checking Account is meant for frequent transactions, including deposits, withdrawals, and checks.

Key Differences

A Savings Account primarily functions as a place for individuals to store money while earning interest. Conversely, a Checking Account is structured to handle daily financial activities, like paying bills or purchasing goods.
Most Savings Accounts offer higher interest rates than Checking Accounts, incentivizing people to save. However, Checking Accounts prioritize liquidity, allowing for a higher number of transactions.
It's common for Savings Accounts to have limits on the number of withdrawals one can make monthly. On the other hand, Checking Accounts often provide unlimited transactions, be it through checks, ATM withdrawals, or debit card purchases.
While many Savings Accounts may require a minimum balance to earn the highest interest rate, Checking Accounts might have minimum balance requirements to avoid monthly fees.
The main goal of a Savings Account is to help individuals grow their funds over time. In contrast, a Checking Account focuses on facilitating the efficient flow of one's daily financial activities.

Comparison Chart

Primary Purpose

Storing money to earn interest.
Handling daily transactions.

Interest Rates

Generally higher.
Typically lower or none.

Transaction Limits

Often has withdrawal limits.
Usually allows unlimited transactions.

Common Fees

Excess withdrawal fees.
Monthly maintenance or low-balance fees.

Associated Tools

Passbook or statement.
Checkbook, debit card, online bill pay.

Savings Account and Checking Account Definitions

Savings Account

A bank account that earns interest on deposited funds.
She deposited her bonus into her Savings Account to earn interest.

Checking Account

A deposit account to facilitate the flow of daily financial activities.
He set up automatic bill payments through his Checking Account.

Savings Account

An account with restricted transactions to foster savings.
After three withdrawals, he was charged a fee on his Savings Account.

Checking Account

A bank account designed for regular transactions.
He paid his monthly bills directly from his Checking Account.

Savings Account

A deposit account paying periodic interest.
The annual interest from her Savings Account was added to the principal.

Checking Account

An account offering tools like checks and debit cards for payments.
She received a checkbook when she opened her new Checking Account.

Savings Account

A financial tool to accumulate wealth over time.
With a high-interest rate, her Savings Account grew steadily.

Checking Account

An account typically without interest but with high liquidity.
Her Checking Account allowed for unlimited daily transactions.

Savings Account

An account designed to encourage long-term saving.
His Savings Account had a withdrawal limit, promoting less spending.

Checking Account

A financial account for managing daily expenses.
He transferred money from his Savings Account to his Checking Account for upcoming expenses.


Can I earn interest with a Savings Account?

Yes, Savings Accounts generally offer interest on deposits.

Do Checking Accounts always offer interest?

Not always; many Checking Accounts have minimal or no interest.

What's the primary use of a Savings Account?

A Savings Account is used to save money and earn interest.

Is there a minimum balance for Savings Accounts?

Some Savings Accounts might require a minimum balance to earn optimal interest.

Can I transfer money between my Savings and Checking Account?

Yes, most banks allow easy transfers between the two.

How is a Checking Account typically used?

A Checking Account is for daily financial transactions like paying bills or shopping.

Are there limits on Savings Account withdrawals?

Often, there are monthly limits on how many withdrawals you can make without fees.

Why might someone have both account types?

To separate daily spending (Checking Account) from savings goals (Savings Account).

Are debit cards linked to Checking or Savings Accounts?

Debit cards are usually linked to Checking Accounts.

Can I set up automatic savings transfers?

Yes, many people set automatic transfers from Checking to Savings for regular saving.

Can I write checks from my Savings Account?

Typically, no. Checks are generally written from Checking Accounts.

Do Checking Accounts have withdrawal limits like Savings Accounts?

Generally, no. Checking Accounts are designed for frequent transactions.

Why might a Savings Account deny a transaction?

Exceeding monthly withdrawal limits might result in denied transactions.

Are online bill payments done through Checking or Savings?

Usually through Checking Accounts.

How do I avoid Checking Account fees?

Maintaining a minimum balance or having regular direct deposits can often waive fees.

Which account is best for direct deposit of salaries?

Typically, salaries are directly deposited into Checking Accounts.

How safe is the money in my Savings Account?

Funds in Savings Accounts at FDIC-insured banks are insured up to $250,000.

Can I deposit checks into either account using mobile apps?

Yes, many banks allow mobile check deposits into both Savings and Checking Accounts.

Which account should I use for everyday spending?

A Checking Account is best suited for everyday spending and transactions.

Do Savings Accounts have monthly fees?

It varies, but some may have fees if certain conditions aren't met.
About Author
Written by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Harlon Moss
Harlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.

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