Here at Public Service Credit Union, many of our Romulus customers frequently ask questions like, “What’s the difference between a checking and savings account?” Both checking and savings accounts offer advantages that savvy Detroit residents will want to utilize. That being said, each account type has different intended uses and thus different pros and cons.
So, what’s the difference between a checking and savings account? In most cases, access to your money and interest rates are the biggest separators between checking and savings accounts. Learn more about the differences between checking and savings accounts with our expert team below!
Why Do I Need a Checking or Savings Account?
Depending on your financial goals, one account type may be more favorable than the other. Checking accounts give you access to debit cards and checks, allowing you to spend your money. Checking accounts have no limits on the number of withdrawals you can make in a month, so accessing your money is never difficult. However, this high liquidity rate means there is usually no interest paid on your checking account.
If you plan to save over a long period of time, you will want to open a savings account to grow your money faster. Savings accounts are a great place to store your extra cash as you can earn back a small percentage over time. You can often set up direct deposit and online banking with a savings account, but your overall access is still somewhat limited.
While federal laws limiting withdrawals to six per month are lifting, many individual banks still have that rule in place for savings accounts. If you go over the limit of six withdrawals per month, your Redford financial institution may charge fees or even convert your savings account over to checking. Planning ahead is critical when using a savings account.
Checking Account vs. Savings - Do I Need Both?
While not strictly necessary, building a well-balanced financial plan includes both savings and checking accounts. The ease of access that a checking account provides is essential for daily living and unexpected expenses. Savings accounts, on the other hand, offer a great way to grow your money without taking any risk. Additionally, having a checking and savings account through the same institution allows for easy access and simple transfers!
Turn to Public Service Credit Union for Financial Guidance
Now that you know the basic differences that separate checking accounts and savings accounts, you can plan your financial future with ease. If you need further information, you can explore our online resources. For personalized guidance, contact us today to start a conversation about your finances.