Difference(s) between a Checking and Savings Account?

[andylawcc]

more questions:

so other than the various withdrawal methods (writing checks, internet bill pay, ATM cards) available to Checking Account and lack of interest rate, there's no difference between Saving and Checking Account?

 

[dullard]

Universal difference: checking accounts have checks that you can write to withdraw money and pay your bills.

Everything else is a grey-fuzzy area. So we can only give you general information. Banks are free to give lots of different 'perks' or different restrictions, and they do. The perks/restriction offers can change daily and they are usually quite different at different banks. That really blurs the line between a savings account and a checking account. So here are general rules of thumb:
[*]Most checking accounts don't give interest. A few do, but that is usually quite small compared to even the small interest in a savings account and that often comes with severe restrictions. Savings accounts give interest in every case I've ever seen.
[*]Most checking accounts charge for the checks (often the first small batch is free, but the rest often are not). This is an expense that savings accounts don't have.
[*]Most savings accounts are more restricted (if restricted at all) with number of withdrawls allowed per month and the minimum required balance is usually higher. Typically a savings account may have a half dozen or fewer transactions a month. A typical checking account may have hundreds. They are both set up so that the fees (if any) are minimized for that usage. Select the usage you will have and go with that.
[*]Most savings accounts give quarterly statements and most checking accounts give monthly statements.

Honestly, at the moment the interest is so small, a savings account has little to no benefit over a checking account. I'd say get the checking account. Then you can pay your future bills with checks. Even better: get both if you can afford the minimum balances. That gives you a lot more credibility when filling out forms (like loans and credit card applications, etc.)

 

[Bryophyte]

Depends on what you want to do with the account. If you want an account to deposit money into that you'll be using to pay bills, get checking. If you're saving money that you want to stay liquid but won't be doing frequent withdrawals, go with savings. If you won't need instant access to the money, go for something with higher interest rate that's not so liquid.

How did you get to 21 and never have a bank account? How are your bills paid? Have you never had a job? Your parents should have taught you how to handle money years ago. Hell, my kids have had savings accounts since they were 4-6 years old.

 

[andylawcc]

:thumbsup: thank you!

 

[dullard]

Also there is the money market account if you qualify. Higher interest than savings accoutns, and limited check writing (usually just a few per month). Of course, this comes with a restriction - minimum balance may be much higher.

 

[wiredspider]

Originally posted by: RagingBITCH
One is for writing checks, one is for savings.

Basically that..

Checking may charge you fees for checking service unless you keep a certain amount in there. Savings are generally free of charge or have a lower balance requirement....
Yea, that sounds about right...

 

[RossMAN]

WTF is next?

"How do I write a check?"

"How do I cash a check?"

"How do I make a deposit?"

"What is my credit card owing balance?"

"What does interest rate mean?"

$#@!

 

[andylawcc]

Originally posted by: RossMAN
WTF is next?

"How do I write a check?"

"How do I cash a check?"

"How do I make a deposit?"

"What is my credit card owing balance?"

"What does interest rate mean?"

$#@!

how to post reply?

 

[RossMAN]

Originally posted by: andylawcc

Originally posted by: RossMAN
WTF is next?

"How do I write a check?"

"How do I cash a check?"

"How do I make a deposit?"

"What is my credit card owing balance?"

"What does interest rate mean?"

$#@!

how to post reply?

Seriously how fscking stupid are some people? Isn't this basic personal finance which most of us took in high school?

What's next?

"HELP!

I bought a new car last month for $10,500 and tried to pay it off today. The bank is trying to charge me $10,765.65, what the hell is that? They said something like "finance" charges? Am I being ripped off? Should I call CNN and the Iron Chef? Bastards are trying to rip me off by charging me this "finance charge" crap, wtf is that?". Can I sue them, should I call Judge Judy? How do I pay them off, I don't have a bazillion pennies? Can I write them a check? What the hell is a check?

It's only a matter of time before that happens.

$#@!

 

[Schadenfreude]

Originally posted by: dullard
Also there is the money market account if you qualify. Higher interest than savings accoutns, and limited check writing (usually just a few per month). Of course, this comes with a restriction - minimum balance may be much higher.

Yeah - my bank (a credit union, actually) has a min. balance of $100,000 for you to qualify.

 

[Zee]

Originally posted by: RossMAN

Originally posted by: andylawcc

Originally posted by: RossMAN
WTF is next?

"How do I write a check?"

"How do I cash a check?"

"How do I make a deposit?"

"What is my credit card owing balance?"

"What does interest rate mean?"

$#@!

how to post reply?

Seriously how fscking stupid are some people? Isn't this basic personal finance which most of us took in high school?

What's next?

"HELP!

I bought a new car last month for $10,500 and tried to pay it off today. The bank is trying to charge me $10,765.65, what the hell is that? They said something like "finance" charges? Am I being ripped off? Should I call CNN and the Iron Chef? Bastards are trying to rip me off by charging me this "finance charge" crap, wtf is that?". Can I sue them, should I call Judge Judy? How do I pay them off, I don't have a bazillion pennies? Can I write them a check? What the hell is a check?

It's only a matter of time before that happens.

$#@!

holy philippic batman! :Q

 

[MrChad]

Originally posted by: RossMAN
What's next?

"HELP!

I bought a new car last month for $10,500 and tried to pay it off today. The bank is trying to charge me $10,765.65, what the hell is that? They said something like "finance" charges? Am I being ripped off? Should I call CNN and the Iron Chef? Bastards are trying to rip me off by charging me this "finance charge" crap, wtf is that?". Can I sue them, should I call Judge Judy? How do I pay them off, I don't have a bazillion pennies? Can I write them a check? What the hell is a check?

It's only a matter of time before that happens.

$#@!

:laugh: It's funny because it's true.

 

[smc13]

If you have a direct deposit you can get a free checking acount anywhere. After you open one you can get a free savings account at ING that has a 2.6% interest rate and it is easy to transfer money from your checking acount to the ING account and back. So, have the money direct deposited to your checking, move most of it to your ING savings account to earn interest, and then move some money back to the checking account to pay bills.

 

[GeekDrew]

Here in Central Ohio, just about every bank offers free checking... some with (low) interest, some without.

I know of at least one bank around here that limits the number of transactions you can make per week on a savings account... though I doubt that's the norm.

I've used both Fifth Third Bank, and National City... I greatly prefer National City... their people seem friendlier if you walk in the bank... of course I know that's location specific

 

[HN]

Originally posted by: smc13
...you can get a free savings account at ING that has a 2.6% interest rate

2.8%

 

[VirtualLarry]

Originally posted by: CPA

Originally posted by: andylawcc
are there restrictions on withdrawal for a saving account? I heard you cannot withdraw more than a certain amount in a savings while you can have near-zero dollars in a checking... ???

What idiot told you that?

You can withdraw as much as you want out of a savings account.

Last time I think I inquired, a "savings" account requires a multi-thousand dollar minimum balance, to keep the account open and earning interest. You will of course earn interest on the amount in the account above that "soft limit", but you're not supposed to touch/withdraw below that limit, at least not without getting penalized. (No, I'm not talking about a "CD" - just a regular savings account at most mainstream banks around here.)

 

[Bryophyte]

Originally posted by: VirtualLarry

Originally posted by: CPA

Originally posted by: andylawcc
are there restrictions on withdrawal for a saving account? I heard you cannot withdraw more than a certain amount in a savings while you can have near-zero dollars in a checking... ???

What idiot told you that?

You can withdraw as much as you want out of a savings account.

Last time I think I inquired, a "savings" account requires a multi-thousand dollar minimum balance, to keep the account open and earning interest. You will of course earn interest on the amount in the account above that "soft limit", but you're not supposed to touch/withdraw below that limit, at least not without getting penalized. (No, I'm not talking about a "CD" - just a regular savings account at most mainstream banks around here.)

Uh, no. Why don't you research that and post some links to back that up? I think you're talking about a money market account. Ordinary savings accounts have very few requirements at nearly all banks.

 

[Legendary]

Originally posted by: Bryophyte

Originally posted by: VirtualLarry

Originally posted by: CPA

Originally posted by: andylawcc
are there restrictions on withdrawal for a saving account? I heard you cannot withdraw more than a certain amount in a savings while you can have near-zero dollars in a checking... ???

What idiot told you that?

You can withdraw as much as you want out of a savings account.

Last time I think I inquired, a "savings" account requires a multi-thousand dollar minimum balance, to keep the account open and earning interest. You will of course earn interest on the amount in the account above that "soft limit", but you're not supposed to touch/withdraw below that limit, at least not without getting penalized. (No, I'm not talking about a "CD" - just a regular savings account at most mainstream banks around here.)

Uh, no. Why don't you research that and post some links to back that up? I think you're talking about a money market account. Ordinary savings accounts have very few requirements at nearly all banks.

There is no generalized rule regarding savings account minimum balances - they vary by bank.

 

[Illusio]

i have a friend who is a banker, he says with most savings accounts you are better off just clipping coupons for the grocery store from the newspaper than trying to make money off the interest. unless you are dropping a ton of money into a CD, a basic savings account wont give you all that much money in interest. Get a checking account if you want money to use, thats what its for.

 

[RossMAN]

Originally posted by: Legendary

Originally posted by: Bryophyte

Originally posted by: VirtualLarry

Originally posted by: CPA

Originally posted by: andylawcc
are there restrictions on withdrawal for a saving account? I heard you cannot withdraw more than a certain amount in a savings while you can have near-zero dollars in a checking... ???

What idiot told you that?

You can withdraw as much as you want out of a savings account.

Last time I think I inquired, a "savings" account requires a multi-thousand dollar minimum balance, to keep the account open and earning interest. You will of course earn interest on the amount in the account above that "soft limit", but you're not supposed to touch/withdraw below that limit, at least not without getting penalized. (No, I'm not talking about a "CD" - just a regular savings account at most mainstream banks around here.)

Uh, no. Why don't you research that and post some links to back that up? I think you're talking about a money market account. Ordinary savings accounts have very few requirements at nearly all banks.

There is no generalized rule regarding savings account minimum balances - they vary by bank.

Thank you.

The minimum balance requirements vary between financial institutions and the products they offer. One of my local credit unions has a $25 minimum which is pretty common.

 

[Bryophyte]

Originally posted by: Legendary

Originally posted by: Bryophyte

Originally posted by: VirtualLarry

Originally posted by: CPA

Originally posted by: andylawcc
are there restrictions on withdrawal for a saving account? I heard you cannot withdraw more than a certain amount in a savings while you can have near-zero dollars in a checking... ???

What idiot told you that?

You can withdraw as much as you want out of a savings account.

Last time I think I inquired, a "savings" account requires a multi-thousand dollar minimum balance, to keep the account open and earning interest. You will of course earn interest on the amount in the account above that "soft limit", but you're not supposed to touch/withdraw below that limit, at least not without getting penalized. (No, I'm not talking about a "CD" - just a regular savings account at most mainstream banks around here.)

Uh, no. Why don't you research that and post some links to back that up? I think you're talking about a money market account. Ordinary savings accounts have very few requirements at nearly all banks.

There is no generalized rule regarding savings account minimum balances - they vary by bank.

While that's true, it's more common to see accounts with $100 minimum balance requirements to open an account and $300 minimums for free (no monthly fee) savings accounts. To say that "a regular savings account at most mainstream banks...requires a multi-thousand dollar minimum balance, to keep the account open and earning interest." is just plain ridiculous.

 

[TheLonelyPhoenix]

Originally posted by: RossMAN
Seriously how fscking stupid are some people? Isn't this basic personal finance which most of us took in high school?

I haven't taken a business or finance course in my life, and yet someone I still figured out how to talk to a teller/operate an ATM.

 

[mwtgg]

Originally posted by: HN

Originally posted by: smc13
...you can get a free savings account at ING that has a 2.6% interest rate

2.8%

SHIEEEET, they raised it to 2.80%?? I gotta get me one, darnit!

And really, as been said, we can only give very general pieces of information. My savings account has 0.65% interest and checking as 0%. However, at my bank, if you keep an average of $1,000 per month, you can open a Money Market checking account where you earn 0.75%, but you have to keep $1,000. Again, this is only based on my bank, it will be different at HSBC.

Edit: Hmm...

 

[DrPizza]

Originally posted by: GeekDrew
Here in Central Ohio, just about every bank offers free checking... some with (low) interest, some without.

I know of at least one bank around here that limits the number of transactions you can make per week on a savings account... though I doubt that's the norm.

I've used both Fifth Third Bank, and National City... I greatly prefer National City... their people seem friendlier if you walk in the bank... of course I know that's location specific

Yes, that is the norm. Federal regulations restrict the number of transactions you can make with a savings account. I had a fit after receiving a rude letter from my bank concerning too many transactions. If it weren't for it being a federal regulation (retarded IMHO) I would have changed banks.

 

[joecool]

Originally posted by: MrChad
How old are you?

i'm guessing, maybe 8 or 9.