What are the differences between checking and savings accounts? 💵

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 Account

• used for everyday spending

• 0.04% average interest rate

• linked to your debit card

• no limit on withdrawals

Savings Account

• saving up for the future

• 0.5% average interest rate

• can be used for overdraft protection

• 6 monthly withdrawals

Pros

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

• Access to a debit card for cashless purchases

Cons

• Lower interest rate than savings accounts

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

Checking

• Pay bills

• Smaller purchases

• Quick cash

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

• Keep track of your monthly spending

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

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