Savings and checking account basically lets you place your money in the bank to ensure it is safe. Therefore understanding the similarities and differences between these two bank accounts can help you effectively manage your funds.
Features: savings and checking accounts are both deposit accounts but the checking account lets you deposit and withdraw your money whenever you wish to, generally through automated teller machine or checks. However the savings account normally does not allow you to withdraw funds through ATM or check.
Benefits – Almost all the savings account types and some checking accounts build up the interest on the balance being held but the savings account generally pays you more interest compared to checking bank accounts.
Functions – Most people use checking bank account to make frequent transactions or to pay their bills in short term. However savings account holds the funds for emergency situations or for long or medium term financial goals and so they offer limited withdrawals.
Liability – Savings and checking accounts both make up the portion of the liabilities of the bank or any other deposit taking organization. These funds are generally used to issue loans or to make other investments.
Limitations – Normally there are no limits placed on the overall number of withdrawals and transfers the consumer can make every month with a checking account. However for savings account they are limited to monthly transactions which are set by the Federal Reserve to avoid people using a savings account in the way a current account functions.