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What is the difference between checking and savings accounts?

A checking account is a bank account you can write checks from, or access several other ways, which tends to make it your go-to, daily transaction bank account. A savings account is where you stash funds that you aren’t ready to use yet, often with the goal of accumulating more. The differences between them affect how you can use each to manage your financial life—and you’re likely to find both handy.

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Checking vs. Savings
Offers easy access to your funds: Designed to save for long-term goals:
ATM withdrawals (may be capped at a
certain amount daily)
Typically offers higher interest rates
Debit card takes funds directly from
your account
Limited access so you won’t be tempted to
use for impulse buys
May provide an option to order checks You may need to move money into checking
to make frequent withdrawals
Easy transfers to pay bills online Can be linked to checking so you can transfer
funds between accounts

You might use it for …

  • Paying bills
  • Grocery or other everyday shopping
  • Saving for a big-ticket item, like a vacation
    or a car

You might pay fees for …

  • Not carrying a minimum balance
  • Not carrying a minimum balance
  • Using other banks’ ATMs
  • Excessive withdrawals—different banks
    have different rules
  • Withdrawing more money than is
    available in your account

The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category. That means you’re protected if your bank were to fail.

Now that you know the difference between checking and savings accounts and how each can help you, you’re ready to get the most out of each and use them to work toward your goals.

Learn more about your checking and savings options from Bank of America.

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The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.

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