Checking Account vs. Savings

Checking and savings accounts have distinct characteristics that make them appropriate for different uses. All checking and savings accounts have specific terms that are established and explained by the banks that offer them.

Checking Account Features

Checking accounts generally do not pay interest. If a bank does offer interest on a specific type of checking account, the rate is usually much smaller than one that can be earned on a savings account. You can typically make unlimited withdrawals from a checking account, and you have the use of a debit card as well the ability to pay with personal checks.

Savings Account Features

One primary feature of a savings account is that you earn interest on the funds in the account. The bank does this because it uses the funds in savings accounts to make loans and conduct other business.
Savings accounts usually limit to the number of withdrawals per statement cycle and require a minimum balance in these accounts to ensure that the bank has enough funds at its disposal.


Some savings accounts charge a fee if the account falls below the minimum balance required. Checking accounts do not usually charge this penalty unless you write checks for more money than you have in the account. It sometimes takes longer to transfer money from a savings accounts than from a checking account. A transfer from a savings account can take up to five days, while you can transfer money from a checking account typically by the next business day.

Age Limits

To obtain a checking account, you must be 18 years old, but you can have a savings account at any age with your parent's or guardian's consent and signature. Some banks allow you to have total control over your savings account at 16 years of age.


There are several types of checking and savings accounts. Two common types of checking accounts are joint checking, which is owned by two more people, and express checking, which was created for customers who seldom need to enter the bank building. An express checking account would be appropriate if you're comfortable using an ATM, telephone or computer to make bank transactions. These accounts usually have low minimum balance requirements and no monthly fees.
Two common types of savings accounts are passbook accounts and high-yield savings accounts. Passbook savings accounts are so named because all deposits, withdrawals and interest are recorded in a passbook, which is updated by the bank but kept by the account holder. This type of account is good for someone who makes infrequent transactions. A high-yield savings account is an account the bank offers only to certain clients because it earns a higher interest rate than other accounts. To qualify, you must make a sufficiently large initial deposit and maintain a high minimum balance.