Drake disagreeing with

So you opened your first checking and savings accounts. What next?

Each type of account has its pros and cons.

What's the best way to use each account so you can have a sustainable financial future?

Checking Vs Savings

An ATM shooting money out into the air Checking Account

  • used for everyday spending

  • 0.04% average interest rate

  • linked to your debit card

  • no limit on withdrawals

An animation of a person flipping a coin into a piggy bank Savings Account

  • saving up for the future

  • 0.5% average interest rate

  • can be used for overdraft protection

  • 6 monthly withdrawals

Checking Accounts

A bank card spinning Pros

  • Easy access to cash balance (cash back at grocery stores or ATMs)

  • Access to a debit card for cashless purchases

John Stewart drying tears off his face with dollar bills Cons

  • Lower interest rate than savings accounts

Savings Accounts

A jar of money being filled with bills

Saving money will help you achieve your financial goals!

There are two types of accounts for that:

Traditional Savings

  • Pros: Works well in tandem with checking

  • Cons: Lower returns on your money, can't be used for spending

High-Yield Savings and Money Market Accounts

  • Pros: Better returns on your money

  • Cons: Need to maintain a higher balance, can't access money at ATM

How To Best Use These Accounts

A woman putting cash on the table and telling her friend,

Checking

  • Pay bills

  • Smaller purchases

  • Quick cash

  • Keep a lower balance (enough to cover monthly expenses)

  • Keep track of your monthly spending

A woman saying,

Savings

  • Big purchases (down payment for a car, education, etc.)

  • Emergency funds & medical expenses (save enough cash to cover 3 months worth of expenses)

  • Backup to checking in case of overdraft

Take Action

A woman saying,

Finding the right balance between spending and saving isn't easy but you can make the best of it by using your accounts responsibly.

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This Byte has been authored by

DB

Dylan Brodeur

PwC Associate

DR

Derek Reed

PwC DAT

BM

Brianna Mazzoni

Digital Assurance & Transparency Associate

NZ

Nelson Zacur

PwC Experienced Associate