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3 Differences Between A Checking Account vs. Savings Account

man researching checking account vs. savings account online

What’s the difference between a checking account vs. savings account? There are many, from the reason why you use them to how they best support your financial habits. You likely already have both, and if not, you might realize that they can both benefit you in their own way. 

To make the best use of these accounts, you must understand the difference between a checking account vs. savings account. Keep reading to learn the primary differences between the two, when you should use them and how they can benefit you financially. 

What Is A Checking Account?

A checking account is a transactional account with the primary purpose of allowing you to make frequent deposits and withdrawals. Since your financial institution expects these regular transactions, they provide you with several ways to access your money, including a debit card, checkbook, transfer capabilities, and ATM access. 

Also, since you’re meant to make frequent transactions and are less likely to leave your money in one account for an extended period, you often have to pay a fee to use a checking account. Though, at Atlantic Financial FCU, we don’t charge a monthly maintenance fee for our checking accounts. 

While some checking accounts allow you to earn interest, many don’t, or the interest amount is significantly lower than you’d find with a savings account.

When To Choose A Checking Account

Checking accounts are designed for spending. So, if you plan to make frequent purchases and withdrawals and your money will regularly move in and out of your account, a checking account is your best option. 

To get the best use of your checking account, try to find one that doesn’t charge a monthly maintenance fee and allows you to earn rewards, interest-based or cash back on your purchases. 

Your checking account shouldn’t be used to store money you don’t plan on spending. That can go into a savings account where you earn more interest. 

A checking account gives you peace of mind in knowing that your money is safely stored and the convenience of accessing your money when you need it. Also, using a checking account versus cash allows you to track your spending and review your budget as needed easily. 

What Is A Savings Account?

A savings account is a longer-term transactional account. 

It is not designed for you to make frequent withdrawals, and you’re generally limited to no more than six transfers or withdrawals per month due to limits set by the federal government. If you repeatedly make more than six transfers or withdrawals, your bank or credit union might convert the account to a checking account. 

Also, since it’s not designed for spending, you aren’t generally given a debit card or checkbook for your savings account.

You will earn more in interest using a savings account compared to a checking account. You want to be sure to shop around to make sure you get the best savings rate on your account. Compare the savings rate of the accounts you’re considering to the national average. 

Unlike a checking account, savings accounts usually don’t charge a fee to take advantage of the service, or if there is one, it’s minimal. Though keep in mind that fees do vary. 

When To Choose A Savings Account

Whether you’re saving money for a particular reason or none at all, you want to store it in a savings account. A checking account allows you to easily withdraw money with no limits, so it’s easier to deplete than your savings. Also, with the limited interest earned, you might find that you’re losing money by keeping it in a checking account vs. savings account. 

If you find that at the end of the month, you have a significant excess of funds in your checking account, get in the habit of transferring that money to your savings account. If you’re spending less than you earn, that’s great, but you can take advantage of it by storing it in a savings account. 

Using a savings account can grow your money faster, and it can help you stick to your savings goals since it limits the number of withdrawals you can make each month. 

Primary Differences Between A Checking Account vs. Savings Account

Now that you’re informed about a checking account and a savings account, here’s a quick summary of the primary features and uses that differentiate the two. 


A checking account is designed for spending money, while a savings account is designed for saving money. 

Withdrawal Limits

A checking account has no limits on the number of withdrawals and transfers that can be done each month because it is designed for frequent transactions. A savings account, however, puts a cap of six withdrawals or transfers on the account, which limits your ability to access your money.  

Interest Rates

Some checking accounts will pay interest, others don’t. You can find some high yield checking accounts and others that offer meager interest. Some even offer rewards similar to a credit card such as cash back or earning money to go toward a gift card, etc. A savings account will always allow you to earn interest, but the rates vary. 

Checking Account vs. Savings Account, Or Both?

Both checking accounts and savings accounts have their place as a financial resource to benefit your finances. For frequent spending, you want to opt for a checking account, but a savings account is best for storing your money.

When you’re looking for a savings account to help your money grow, you want to find one that will meet your savings needs. Not all savings accounts are created equal, so be sure to review the differences in the accounts you’re considering and how they can help you achieve your financial goals. 

At Atlantic Financial FCU, we have several checking accounts and savings accounts from which you can choose. We are confident that you will find one to fit your needs.

Learn More About Checking Accounts

Learn More About Savings Accounts