Checking & Savings Accounts: What's the Difference?
Last updated May 4, 2023
When you go to the bank to open an account, you’ll typically have two options for the type of account you can open: checking or savings. Here's the difference between the two and why they're important to your financial future!
Before making any big financial decisions, we strongly advise you to talk to a parent/guardian or a trusted adult. They can help you make informed choices about building credit and taking on debt that can ensure your financial stability and success in the future.
What is a checking account?
A checking account is a bank account for your everyday expenses. You can use it to make purchases and withdraw cash, have your paycheck deposited directly into it, and use it to pay bills. It’s a convenient way to quickly access your money - anytime, anywhere. Requirements for opening a checking account will vary based on the bank you choose, but keep in mind there are fees associated with a checking account - like overdraw fees - if you don’t keep an eye on it.
What is a savings account?
A savings account is a great place to save your money for both short and long-term goals. Perhaps you want to save up for a vacation or keep money stashed away for an emergency - your savings account is a great place to do that! Savings accounts are not meant for everyday spending like checking accounts; instead, they’re meant to help you put away money you don’t need to spend right away. Unlike checking accounts, many savings accounts earn interest, meaning the bank pays you money to keep your money in the bank (and who doesn’t love making free money)?
Take a screenshot or save the image below to reference when opening up a bank account:
For more money management tips, be sure to check out the rest of our FREE money management resources to learn how to be a smart spender and saver! And if you have any job or finance-related questions for us, just text #Jobs to 33-55-77 to chat with one of our advisors (if you're on a mobile device click here to have the text message set up for you)!