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What is the difference between checking and savings accounts?

Both have different advantages—but each can help you get closer to your financial goals.

Read, 4 minutes

You’ve probably got a basic awareness of the two most common bank accounts, checking and savings. But if you’re just getting started managing your money, you may not understand fully how each one works and how you can get the most out of them. Here are the important differences between checking and savings accounts and ways to make the most of them.

How checking and savings accounts differ

The primary benefit of a checking account is to provide you with access to your money for everyday needs. Savings accounts, on the other hand, enable you to set aside money for longer-term goals. Savings accounts pay interest on balances. Checking accounts generally don’t, and the ones that do tend to offer very low interest rates.

Both types of accounts allow direct deposit of your paycheck, are federally insured up to $250,000 and may give you access to Mobile and Online Banking.

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Features of checking and savings accounts


Designed for spending

Designed for saving

Multiple ways to make payments, withdrawals

Limited access to avoid impulse buys

Usually doesn’t pay interest

Interest earned on balance

Easy to track spending online

Easy to build balance with automatic transfers

What can I do with a checking account?

A checking account offers easy access to your money and flexibility in the way you pay for your purchases. In most cases, you’re able to pay by writing checks or using a debit card. A third option is paying via the Digital Wallet on your smartphone.

In addition, you can transfer money to other people and pay bills through Mobile and Online Banking, or use an ATM to make deposits or withdraw cash. And you can check your balance, track spending and set up alerts through Mobile and Online Banking.

A checking account can also receive deposits via transfers (digital deposits) and deposited checks through Mobile Banking.

How do these ways of paying through a checking account work?

Debit cards

Most accounts come with a debit card for making purchases. You may have to enter a personal identification number or PIN to complete your transaction, with your purchase amount subtracted directly from your checking account. If you want, you can enter your debit card into a Digital Wallet on your smartphone, then pay using your phone.

Quick tip

Keep your debit card PIN secure. Never share it via email, online or text. Create a PIN that’s easy to remember but difficult for someone to guess.


You can withdraw cash, make deposits, check your account balance and transfer funds between accounts at automated teller machines (ATMs). But be aware of fees. Your bank is unlikely to charge you for transactions at its ATMs, but there’s often a charge if you use other ATMs. Some banks and credit unions will reimburse you for those fees. Consult your checking account fee schedule for more details.

Mobile and Online Banking

Beyond allowing you to do your banking whenever it’s convenient, Mobile and Online Banking may offer a host of digital tools to help you stay on top of your finances. Among them:

Schedule payments for recurring bills such as utilities

Set Alerts for unusual account activity, or when your balance falls to a preset level

Deposit checks from your smartphone

Checks and paper statements

With some checking accounts, the ability to write paper checks may be an option. Additionally, all banks are required to generate monthly statements for checking accounts. You can choose to have paper statements mailed to you or receive them digitally.

Do checking accounts come with any fees?

In many cases they do. The most common ones are overdraft, ATM and monthly maintenance fees. A bank may waive maintenance fees if you keep a set minimum balance in your account. The good news is that there are some free checking accounts and steps you can take to avoid fees. Always review the bank’s fee schedule before opening an account and check into options for overdraft protection if you think you may need it.

Quick tip

You can often avoid minimum balance requirements by banking online, setting up direct deposits or, for students, opening a student bank account.

What are the advantages of a savings account?

Because they’re a known way of keeping your money safe but accessible, and because they earn interest, savings accounts are often the first choice for those looking to put aside money for the future. Many children learn about money through savings accounts with their parents. Teenagers use savings accounts for money from chores or jobs. And adults turn to them to build emergency funds or to help reach short-term (a car, a vacation) or long-term (college, a house) goals.

It’s not as easy to gain access to the assets in a savings account as it is with a checking account—which means you’re less likely to withdraw funds for impulse buys. You may be able to set up automatic transfers from your checking account to make saving easier.

What are savings accounts limitations?

Savings accounts offer relatively lower interest rates than other types of accounts and investments. They also may have a limit on the number of withdrawals you can make each month. You may be subject to fees if you make too many withdrawals or do not maintain a minimum balance.

Should I have both checking and savings accounts?

Because they serve different purposes, it can be helpful to have both a checking account and a savings account. Many banks allow you to link your checking and savings accounts, so you can easily transfer money between them. Linked accounts can help you avoid overdraft fees. And if you have a debit card connected to your linked checking account, you can also withdraw cash from your savings account through an ATM.

One note of caution: This easy access to savings can have its disadvantages for people who have difficulty budgeting their money. Frequently dipping into your savings account will negate your efforts to grow your savings.

How secure are checking and savings accounts?

A checking or savings account is far safer than carrying cash. You’ll automatically enjoy the built-in security features offered by reputable banks, including passwords, protection against unauthorized debit card transactions, and online security protocols such as firewalls, encryption and multifactor authentication, all of which can help protect against identity theft and fraud.

Opening a bank account—whether it’s checking, savings or both—is an important step toward managing your money and building your financial foundation over time.

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The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America Corporation and/or its affiliates 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 when making decisions regarding your financial or investment management. ©2024 Bank of America Corporation.

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