pic sources: credit.com
In today’s world, bank accounts are a must for everyone . From making payments to saving and sending money it is an account which comes into being . People use bank accounts for both commercial and personal purposes.
There are two types of accounts available or any client who whishes to open one .
These are savings account and Checking/Current account.
Depending on various factors like purpose, ease of access etc,the client can choose and decide which one would suit him.
A current/Checking account is the type which is used for everyday transactions. It is the most basic account offered to clients.
A savings account is one which intends to save or store money. A savings account helps the holder to grow their money by providing interest over time .It is the client’s choice whether they want to withdraw cash or not.
Difference between checking and savings account –
- Account fees – With checking accounts ,there are a number of criteria that the client needs to meet.
For instance ,they may have to make certain number of transactions per month or it is also likely that they are required to maintain a specific amount of money in their account as the minimum balance criteria.
Other charges may also be incurred which varies from one bank to another.
Whereas, a savings account is typically free of charge. The only requirement is that the owner does not exceed the withdraw limit they are assigned.
Some banks however impose their own rules and regulations according to which the client is required to keep a minimum balance available in the account like checking account.
Which if the customer fails to maintain can be imposed account maintenance charges.
- Interest rates- Most of the banks and credit unions does not provide any interest on the checking accounts and if any of them does, it is a very low rate which is almost unconsiderable.
It should be understood that to determine the applicable rates ,banks take in note to two main things –
- a) the type of savings account maintained by the individual or holder
- b)the sum of money deposited in the accountThe interest rates of a savings account is much higher than that of a current /checking account and online banks offer a bit higher interest bearing accounts than normal or traditional banks do.3.Debit Cards – A checking account often comes with debit cards which allows the user to withdraw money but only the amount already available in the account.Savings account does not always come with debit cards and money can be withdrawn by traditional money withdraw methods from the bank but some banks do offer credit cards for the savings account taking in note of the policies it has and also the requirements and requests of the clients.4.Bill Payments – Using a checking account, an user can gain access for conducting a number of transactions like bill payments ,money transfer etc.Where as in a savings account ,such facilities are mostly not available and to avail transaction,the owner must transfer the money first to his checking account .A checking account allows user to perform as many transactions as he want but in case of a savings account there are limitations as to how many times a person can withdraw money in a certain period of time but, the number of times he can deposit has no limit and can be done as much as required.Taking in note of these above mentioned points, it is now clear to you as to which type of account performs what jobs and the pros and cons of each so, it is up to you to choose what to go for and the one which best suits your requirements.