When going to the bank, we have the option to create a savings account or a checking account. Each one of them has its characteristics, so your choice will depend on the needs you have.
For many users, having a bank account of both types is essential. With them, you can use which one you need in each case that comes your way. Mainly, those that are savings are just to keep money that you can use in the future. On the other hand, those who currently use to make payments, and withdrawals use your funds on a more regular basis.
Now we’ll dive into each of the account types and how they can help you. So, you will know the differences that both have so that you can open the one that best suits your needs. Take note and take advantage of each of these options that are available in banks.
What does a checking and savings account offer?
In each bank, you can request the opening of a savings or current account. Everything will depend on meeting the requirements that are requested to save your money. Each of them has its quests as we already mentioned, however, now we will take a closer look at them.
In the case of the current account, it allowseasy and safe handling of your money. Through it, you can have the cash you want at any time. These accounts can also be called “deposits”, being one of the most frequent to open in banks.
With them you can carry out different procedures, be it payments, transfers, withdrawals, or other actions. As it does not aim at saving by the user, it does not have any profitability. It is only designed to use whenever the user wants it.
On the other hand, the savings account can generate returns on all the money you are saving. Its name explains it simply, they intend for the user to store money there that he wants to save. These may have limits on the number of withdrawalsmade in a month to encourage savings.
What benefits does each of these account types offer?
Now that we know better what each of these types of accounts is, it’s time to delve into them. We will mention each of the benefits and special features that they usually offer to users.
Benefits of having a checking account
The main task of this account is to help the user to manage each of their economic needs. All this is through the following tools that we will mention.
A debit card
They use whenever you need to withdraw cash through an ATM. They can be used at ATMs of other banking entities; however, they charge a commission for this service. With these cards, you can make payments at different points of sale to buy what you need.
These are not the same as credit. The funds spent or withdrawn from ATMs will debit from what you have in your checking account. It is not a loan that you are requesting from the bank.
Checkbook
One of the most used benefits is payment by check. The bank gives a checkbook to the name of the owner user so that he can use it whenever necessary. As in the previous case, the funds will come out of your checking account. The check must always be less than the total amount, otherwise, it cannot be cashed
Direct deposits
It allows your employers the opportunity to make a direct salary payment to this account. So, you won’t have to cash checks and go to a bank. They are ideal for digital transfers, with a receipt that shows the reference code and the amount
Benefits offered by savings accounts
As we already mentioned, these accounts aim at saving money for the user. It does not have benefits like the ones we mentioned in current accounts. The idea of banking entities with this type of account is that money can be stored for a long time. However, you can have different types of savings accounts.
A high yield
In this case, these accounts offer a higher interest rate than traditional savings accounts. It is usually from 1% to 2.2%, while in traditional ones, it is only 0.01% on the balance you have. This type of account is more common in entities that are online and in some cooperatives.
A certificate of deposit
These accounts are usually much stricter. Users will receive a fixed interest rate and a fixed withdrawal date, all for a given period. The interest rates are usually higher, but they propose so that the user does not use them.
The time terms can range from 3 months to 5 years. Money cannot be accessed before this time frame unless a withdrawal penalty pays. They are usually ideal for those users with long-term financial goals. Different from a traditional savings account that allows more access to your funds
Open a savings or checking account according to your needs
The differences between a savings account and a checking account are marked. Checking accounts allow you greater access to the funds you have, and you can carry out different activities. Although there are different types of accounts, these are the most common
However, the one destined for savings can become a great help to be able to meet financial goals. Many users use both accounts, but it all depends on your financial needs.
