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Checking vs. Savings Accounts: The Basics

Checking accounts have no transaction limits, so they're best for spending needs. Savings accounts have limits and higher interest rates, so they're best for saving goals.
Banking, Banking Basics
Savings image

Checking vs. savings account

Knowing the difference between checking and savings accounts is an important step to managing your money well. Both accounts are available at banks and credit unions, and you’ll want to consider separate factors when getting each one.

  • Checking account: for everyday transactions such as purchases, bill payments and ATM withdrawals; typically earns less interest

» Ready to compare checking? See our best checking accounts list.

  • Savings account: for storing money and earning interest (meaning a bank pays you to keep your money there); less access to funds
General useSpendingSaving
Withdrawal limitsNoneSix per month
(excluding in-person and ATM withdrawals)
Does it pay interest?Sometimes; typically minimalYes; interest rates vary
Common fees
  • Monthly maintenance fee (with ways to waive it)
  • Overdraft fee
  • Out-of-network ATM fee
  • Foreign transaction fee

  • Some checking accounts don't have all these fees.
  • Monthly maintenance fee (with ways to waive it)
  • Savings withdrawal limit fee

  • You can find some savings accounts that don't have these fees.
    Minimum balance requirementsVaries Varies
    General features
    (but not always available)
  • Debit card
  • Paper checks

  • Direct deposit
  • Overdraft protection
  • Branch and ATM access
  • Online and mobile banking services (bill pay, balance inquiries, transfers, account alerts, mobile check deposit)
  • Branch and ATM access

  • Direct deposit
  • Online and mobile banking services (balance inquiries, transfers, account alerts, mobile check deposit)
  • Checking accounts

    Checking accounts give you easy access to your money. You can make transactions in many ways, including online transfers, ATM withdrawals, debit card purchases and personal checks.

    Checking accounts give you easy access to your money.

    But the money there can overstay its welcome. Checking accounts tend to pay low to no interest so you will earn little, or nothing, on your money. If your checking account has more than enough in it to pay bills and for daily spending needs, move some money into a savings account.

    The best checking accounts tend to have no monthly fees (or easy ways to waive them) and free access to nationwide ATM networks. Some even have sign-up bonuses.

    Savings accounts

    Savings accounts typically have higher interest rates than checking, making it easy for you to grow your money faster.

    Per federal limits, you can take money out of savings accounts only six times a month.

    You can access your funds to make some transfers or withdrawals, but these accounts aren’t meant for everyday purchases. In fact, per federal limits on savings withdrawals, you can take money out of savings accounts only six times a month via online banking, among other methods. Going over that limit can result in a fee or, if you do it multiple times, your bank might convert the account to checking.

    The best savings accounts have rates higher than 1% as the annual percentage yield. For context, keeping $1,000 in a 1% APY savings account would give you $10 in interest after one year. You can find them here.

    A regular savings account isn’t your only option for earning more interest. If you don’t expect to withdraw your money for several months, or have a large amount to deposit — say, $10,000 or more — you can consider other savings options such as CDs and money market accounts. They have stricter requirements but usually offer better rates in return. And unlike investments, earnings are guaranteed.

    Checking and savings at the same bank

    There are two main benefits: If you keep both accounts at the same bank, you can manage your money in one place and transfer between accounts fast, with funds typically available within minutes. Some banks also waive monthly fees if you link up checking and savings. This pairing makes things simple and convenient.

    Pairing them makes things simple and convenient, but you may not find the best checking and savings at the same bank.

    But there’s a downside: You may not find the best checking and best savings accounts for your needs at the same place. For example, banks with some of the highest savings rates don’t always offer checking. If you’re ready to maximize savings but don’t want to change up your current accounts, consider opening a high-yield savings account at a different bank. Just make sure you have enough money in both banks to avoid fees.

    We’ve also analyzed banks for those with checking and savings accounts that rate well. See our roundup of best banks for checking and savings.

    Updated Oct. 19, 2017.