What is The Difference Between Checking and Savings Account?

What is The Difference Between Checking and Savings Account?

Table of Contents

Discover Savings Account

Keeping cash is never considered a safe option. to keep the money in a safe place from where you can easily use it when you need them is the idea every single person has. Such convenience can be achieved by having a savings account in a bank. It not only keeps your money safe but also provides you with a monthly interest on it.

Due to such activity of the bank the savings amount that you have provided also compounds it monthly. Given below are some of the aspects of a savings account. They are not known by many people but having an understanding of the same could be of much help to the customers.

How Do Savings Accounts Work?

The savings account is promoted by the modern banking system and hence they are providing many of the options to the people like a zero account balance, an account that provides higher interest rates, provides debit cards to the members of a family, and larger limits that can be used in any sort of transactions. 

Also in festive seasons a lot of schemes and beneficial terms are put up by the banks to lure their customers.

There are some necessities that are to be looked upon before you apply for an account. The list includes the interest offered on the savings, the lowest amount the account can hold, any deal that work out endlessly, access to the atm, internet access etc. 

some of them are also provided below :

 

Attention Rates  

The interest rates are one of the prime reasons why people keep their money

 in a bank rather than keeping it with them. The money that is provided in the

 account compounds itself to a certain rate that is prescribed by the bank. 

At times the banks provide a better option of interest rates according to the

 amount of payday loan no credit check that is kept on the amount. Hence it

 is better to keep as much cash as you can to such accounts.

 

Minimum Monthly Balances

 

Some of the banks require customers to maintain a minimum balance in their savings account. A fee is taken from the customers of a financial institution if the account of the customer does not have enough cash in its financial records
A fixed amount is to be applied to you as a penalty if your account is not as per the lowest stability. On the other hand such fee is not taken by some institutions hence you may search them out as they are more beneficial. This may seem helpful if you keep an account that may be in any amount of money at any time.

 

Unlimited Transactions 

Banking transactions on a savings account normally consists of either deposit or withdrawal. Whereas some of the banks place a limit to the withdrawal or any transactions that the customer needs to make or try to make. 

If any transaction is made over the limit permitted by the bank then the customer is charged a fee or a penalty as per the defied terms under the savings account operating procedure. On the other hand unlimited transactions are provided to the customers by some banks on some sort of savings account.

 

 

ATM Access 

An opportunity to have the cash any time anywhere and anytime of the day is provided by the banks when you use an atm. Atm’s are designed to serve such purpose to the people. 
Atm’s are usually provided to a person when the savings account is made. Also nowadays to provide comfort to the customer the bank members also provide debit cards to the family members with the help of the parent card.

What are the Benefits of a Savings Account?

 

A savings account has a variety of uses, whether it come to creating an emergency account that can be used in case of an emergency such as job loss or illness within the family, or a savings account can be used to help save for a specific goal, whether it be a short or a long term goal.

With many types of savings accounts available through a variety of financial institutions, the consumer has a myriad of accounts which can be chosen from, each with its own separate benefit system.

Here are some of the general benefits which can be seen from opening and

making regular deposits into savings accounts:

  • A savings account can be used to earn interest on money that would otherwise not earn any interest.
  • A savings account can be used as security in order to allow the individual to prepare for an emergency where funds are required immediately.
  • A savings account can be seen as collateral for individuals that are seeking a loan or to secure funds against another type of lending program.
  • A savings account can allow an individual to maintain personal security for the money that they have earned.

Online Saving Account Information

In fact, many online credit card purchases or paypal transactions only occur due to deposits or accounts in conventional banks. Without these, then no transactions would have taken place. 

Indeed, online savings accounts are still not that popular, and because of the lack of users and acceptability, it does not appear that use of them is practical.

However, only a fool would think that this is to stay that way. for one thing, it is precisely because some depositors in online accounts gain relatively high interest rates as compared to the regular savings accounts. 

When online savings accounts become more popular in the future, the deposit interest rate is expected to correspondingly go down.

Thus, today is the perfect time to avail higher deposit interest rates. Given this, having an online savings account then is a great investment and helps generate extra income. 

If you want to avail this great opportunity, you can start an internet savings through some institutions that offer such financial services online. With higher deposit interest rates, you will see a significant gain or profit from your deposits in a few months or a year.

Having An Online Savings Account Is A Definite Advantage

If you are one to make plenty of internet purchases, or in fact, make a living through an online business or any small business, then having an online savings account is a definite advantage. 

With this type of savings account, you can have instant access to your money and can make an online money transfers to accounts of clients or colleagues anytime.

And due to these benefits, some companies, such as internet providers or telecommunication companies now allow clients to pay their services online.

Some loan providers who embrace this system also now accept payments online through internet banking. Today, the number of life insurance providers that accept monthly payments online is also increasing.

With An Online Savings Account 

You don’t have to go through the hassles of going to your bank during business days to make a transaction. 

Another bonus of venturing into online banking is that you can check your balances or deposits and request for a bank statement online anytime of the day without having to visit your bank. It is also pretty easy to apply for an online savings account.

But again, the society has not totally embraced this system yet. there are still many companies still do not accept ‘online money’ as quickly. They, especially home loan providers, would still find it easier to verify the presence of your bank account and your ability to pay if you use a traditional bank account.

Another problem is that, with an online savings account, the time in between a transfer of funds is longer. It may take days or even weeks for your money to ‘materialize’ and be displayed in your online account, and this delay may prevent you from making a necessary purchase.

Store only about one third of your savings online. this way, even if your internet connection at home is out or if you can’t find an open internet café in the middle of the night, there is still the trusty old automated teller machine. 

In addition, there are times that you would need liquidity, for any number of reasons. either way, it helps to have those funds in handy at all times.

In Short, Having An Online Bank Account Should 

Be one of your many sources of money. Just as it is totally impractical to only be able to hand out checks as payment, or to carry tens of thousands of dollars in your wallet, it is also not practical to keep all your money online.

It is a good idea to open an online savings account, but only as part of your

effort to diversify your money. I suggest that you divide your savings 

according to their liquidity, wherein your online funds should be in between

the more liquid items such as cash and traditional bank accounts, and less

liquid instruments such as stocks and bonds.

 

Set Up Savings Account Online : What To Look For In An Online Savings Account?

Fdic insurance –In order to secure the viability of the us banking system, the federal deposit insurance corporation (fdic), an independent agency of the fedral government, provides insurance in each qualified bank account for each qualified institutions.

Insurance is generally provided to a maximum amount of $100,000 for an individual account or per depositor if the depositor has multiple accounts (i.e., a joint account with two holders is insured to $200,000, provided neither has other accounts with the financial institution).

However, where a depositor has multiple accounts at the same financial institution, their maximum insurance is only $200,000 per depositor (i.e., a joint account with two holders is insured to $400,000, provided neither has other accounts with the financial institution).

Or while all deposits (cds, checking, savings) held in the same type of ownership are added together and insured to up to the maximum amount, funds held in different types of ownership (individual, joint, trust, retirement) may fall under separate fdic insurance provisions.

Please visit the fdic’s website to determine if your financial institution is insured and use its “ask edie” program to determine your coverage limits.

Deposit your savings only in fdic-insured institutions and not to exceed the fdic coverage limits.

Liquidity – The ease of moving money in and out of a savings account on short notice.

Money movement  The ability to easily and freely transfer money to checking accounts and/or savings accounts at other banks.
Avoiding pitfalls when opening a savings account or money market account.

Stability of rates – There is virtually no guarantee that a rate will not fall after you open a savings account. while some banks are raising savings rates to become more competitive, you will occasionally notice a decline in the savings rate that a bank is giving (even in a rising interest rate environment), often entirely without notice.

Occasionally, a bank will pledge to maintain a rate for a certain period of time. however, if you require greater certainty and believe that short term interest rates are not likely to increase soon, you may be better off investing in short term certificates of deposit.

Introductory rates – Some banks, particularly online banks, will lure you to open a savings account with them for a promotional rate which is only good for first time account holders for a certain period.

Graduated rates  Savings accounts provide higher returns when you fund them with significant amounts of assets and lower the rate if you fall below that level.

high transaction fees – For transferring money to other accounts and/or for penalties for transferring more than certain amounts within a given time.

Best Bank Savings Account Interest Rates

Rates are low right now, but they’ll rise as the economic crisis eases.  Here is current list of the best high yield savings accounts and their current interest rates.

Note: all of these banks earn 3+ stars via the safe & sound rating from bankrate except as noted.

This  first group of banks offer excellent customer service, great rates, and a good user interface:

  • E*trade bank offers 1.95% apy, no fees, an automatic savings plan. $1 minimum to open.
  • Hsbc direct offers 1.85% apy, no fees, web interface. $1 minimum to open. named “best online savings account” by kiplinger’s personal finance in 2006. Only two stars from bankrate’s safe & sound rating.
  • Ing direct offers 1.65% apy, no fees, an automatic savings plan, web interface. no minimum.

This second group of banks is also worth considering. they tend to have stiffer requirements, more hoops to jump through, or lower customer reviews:

  • Shorebank offers 2.80% apy with no monthly fees and a $1 minimum balance. Shorebank bills itself as a community development and environmental bank. Only two stars from bankrate’s safe & sound rating.
  • Slly bank offers 2.50% apy, checks, atm card. $1 minimum. fees on balances below $500.
  • Savings square offers 2.30% apy, no fees. $1 minimum to open. electronic interface only.
  • Presidential online bank offers 2.25% apy, no fees, atm access, web interface. $5,000 minimum to open. Rate applies to balances up to $35,000. any portion above this amount earns 1.50%.
  • Fnbo direct offers 2.15% apy, with no monthly fees, no minimum balances, and “no strings”. $1 minimum to open. 
  • Wt direct offers 2.01% apy, no fees. No minimum to open, but your interest rate drops to 0.50% if you don’t have a $10,000 balance after 60 days.
  • Capital one offers a variable rate, from 1.01% to 2.01% apy, no fees, free checks and atm card, an automatic savings plan. $1 minimum to open. Rate is 1.01% on balances below $10,000. This is a money market account.

Checking Savings Accounts

When you need cash and you need it checking savings accounts fast you always need to know what your options are and where you can turn to get the money you need. 

There are many ways to get money and get it in a hurry checking savings accounts and you need to figure out what is best for you. Cash advances for checking savings accounts are out there, but you have other options as well.

You could go and pawn something that checking savings accounts you own that is worth some amount of money. This can get checking savings accounts you a few hundred dollars in a hurry depending on what you have to pawn. 

Once you get your cash just remember checking savings accounts that you will have to pay it back to get your things back from the pawn shop. This might not be the best option for you. 

You can also get online and find cash advances for savings accounts. These are perfect for those that do not have a checking savings accounts and think that they cannot get a payday loan because of this. 

They will use your savings account instead and you might have to fax a bank statement with your account number of checking savings accounts on it, but that only takes a few minutes.

This is a better option for checking savings accounts than calling around to all your friends and family members to find out if anybody is willing to lend you some cash for a few weeks. 

It is always better to owe money to someone you don’t know than to someone you do know your checking savings accounts. this is something that makes life a little easier. 

What Is a Checking Account?

The best thing for you to do is to stop hiding your money in the freezer and put it into a bank’s free checking account

With a free checking account, your money is insured by the federal ban; So, wherever you have chosen to deposit your money, be it a bank or credit union, you will get your money back even if they are shut down.

How Does a Checking Account Work?

Most of the banks offer free checking accounts, whereby the clients have to deposit a minimum sum of money to open it and maintain a certain balance. There are other checking accounts that do not require a “minimum” deposit; however, the bank deducts a certain amount on withdrawal.

The financial crisis has made them rather scarce, but small banks and credit unions still offer free checking accounts. banks offer such services to increase customers, with the promise of saving them money.

The drawbacks

Although it may sound like a good idea, you should know about the drawbacks of a free checking account. If you have such an account, you’ll most likely not get any interest.

Services not offered

With a free checking account, you might not be able to see your checks once they’ve been paid. Only some banks put up the check images online. this isn’t a major drawback, though. 

You rarely need to view your check for personal accounts, and there are always other ways to track payments. You can still request a copy of a particular check from a free checking account.

Though it saves you money, choosing a free checking account deprives you of the advantages of stop payments and cancelled check return. If you aren’t fond of shopping then you aren’t missing on a lot, but if you like to shop around, you should consider an account that offers these services.

Hence, these accounts are a good idea if you don’t need the extra services and your balance is relatively low. If you do require the services while keeping this account, you’ll have to pay a fee for each service.MT

 

Opening Bank Account Credit Score : Can You Open a Checking Account With Bad Credit?

It’s not fun being turned down for a bank account simply because you have messed up your credit. And i’m sure most would agree, it’s not fair either. What does bad credit have to do with getting a checking account?

I have no idea why banks turn down people simply because of a bad credit score. Your credit score reflects how you can pay your bills. Your checking account simply has to do with you depositing money into your own bank account to write checks.

Banks Probably Assume The Worst With A Bad Credit Score

Thinking if the person cannot pay their bills, they may end up over drafting their account as well which in my opinion is bogus. But in the world that we live in, people are being turned down daily by the thousands. They cannot open checking accounts because of their bad credit scores.

Think about this, Would you rather have bad credit and be turned down for a

bank account? or be in chexsystems and be turned down for a bank 

account?

My answer would be, i’d rather be in chexsystems. simply because, people with bad credit will have those marks on their credit reports for seven years. People who are in chexsystems well, only 5 years. still, 5 years or 7 years that is alot of years.

Can You Open a Savings Account if Your in Chexsystems

The banks tend to budge a little more better toward you after you have been listed for about 3 or 4 years.you see, with today’s economy banks are being more protective than ever and their requirements are stronger than ever. meaning, if you have bad credit you most likely will be denied a checking account.

If they really want your business and they pull a chexsystems report and you have been listed for 3 or 4 years you may have a really good chance of that bank opening the account for you. That is, if no other bank listed you after your first chexsystems mark.

People Who Have Bad Credit

 Have to prove to their creditors that they can be credit worthy again, before they will even get another credit card. So they have to start off with low limit cards and begin again until they prove themselves. Once proven, their limits are raised by the creditors.

second chance checking account with bad credit is exactly the same way. You have to prove to the banks that you can do this. That you are not going to overdraft your account. there are banks that give you a second chance. 

These banks will report your account in good standing (that is if you keep it in good standing) and this will give you the boost and reference to finally be able to open a new checking account in your area.

With over 90% of banks running credit checks now-a-days more people than ever are being turned down because of bad credit. 

So, get an account that allows for direct deposit and offers you a visa or mastercard debit card. Even if no check writing is available. Use this account for at least a year, and get the credit reference on your report. Then go apply for a checking account in your area.

Show them that you opened this bank account over a year ago, and have never overdrafted your account. Show them you can be responsible.This is the best solid proof one can get to show the banks that they too can open an account for you with checks, and trust you just like the previous bank did.

Apply for a Free Checking Account Online

Paying through a free checking account is safer, cheaper and more convenient due to a number of reasons. Paying bills through checks is easier than buying money orders, not to mention that you have a proof of the payments made.

Banks now offer atm (automated teller machines) cards that make paying at stores just as easy as it is with a credit card. Also, with an atm card, you have access to your money 24/7.

When You Open A Free Checking Account

Most banks offer a certain amount of interest in case it is a savings account. Over time, this helps your money to grow much more than its original amount. Hence, even when your money sits idle in an account it continues to increase.

Having your money in a free checking account can open many doors for you. Getting a loan for a house or a car or taking a significant life decisions is made easier as banks tend to favor their existing clients more than outside customers.

If you are a student, getting a student loan also becomes easier, since having a checking account helps making your credit rating better and shows the bank or other private lenders that you are capable of managing your money.

Online banking is another convenience you get to experience when you start banking. 

With Online Banking 

you can access your money and bank records anywhere in the world. It offers all kinds of services, from online transactions to checking your account activity, with a click of a few buttons. You can even download your banking history and balance your account manually.

With this facility, even if you are on vacation in another country, you can pay your bills online in your own country. Long gone are the days when banks used to charge customers for even having an account with them. 

Now in the fresh new world of free checking accounts, banks literally pay

you for using some of their facilities like the atms or their credit or debit 

cards.

3 Reasons Why Everyone Should Have an Online Checking Accounts

Before you start choosing which checking savings accounts to have you need to understand what each account type is.

Firstly there is a traditional checking savings accounts. This comes with a check book, monthly statements and you can usually have an checking savings accounts overdraft at a cost.

A checking savings accounts will not usually have a check book and you need to withdraw money either from your local branch or via a cash card. You can only withdraw cleared funds and there is no option for checking savings accounts an overdraft.

Although a checking savings accounts does not come with a check book you can usually get one written free of charge from your local branch as long as you have enough cleared funds in your account. 

Internet banking will usually refer to checking savings accounts. Some savings checking savings accounts are starting to come online, but you will still not have a check book.

Below are our three reasons why the best checking savings accounts is an

internet checking account:

  • You can bank when you like. No more working to the banks time table. You make your payments, checking savings accounts, check your balances, transfer funds between accounts at whatever time suits you.
  • You do not have to deal with the queues in bank branches for checking savings accounts any more. It is great when you get to the branch and find checking savings accounts that there is an empty customer service desk just waiting for you, but how often does this actually happen? Is not it more likely that there person on front will take forever at the counter and checking savings accounts the person behind will have a brood of kids with them?
  • Cut down your paper statements about checking savings accounts. With internet banking you can usually now have your paper statements turned off. This means that you can simply view your checking savings accounts and file your statements electronically. This will save you filing endless paper statements which you will rarely, if ever, look at. This will save you time every month checking savings accounts and you will save not have filing boxes and cabinets in your home.

So with all the options in front of you now, you can see why the online checking savings accounts is the easiest and most versatile account to have.

Managing your checking savings accounts is important, but it does not

have to be time consuming.

The Best Alternative of Checking Account

Our faith in the credit industry is slowly fading. banks are going bankrupt, investors are coveting millions of dollars and the stock market has collected many families entire savings. 

We have been forced to turn to other options. Whether it’s solely for our loss of faith in the credit companies or our suffering credit scores as a result of this economic tragedy, many of us have turned to resources like a prepaid visa credit card.

Over the last decade or so the society has become engulfed in the concept of owning things they cannot afford now, but will pay a credit company interest plus the principal balance so they can get what they want right away. This has put families in debt, interest rates have sky rocketed, credit scores are the lowest they have ever been.

This is why we are turning to solutions like the prepaid visa credit card. We are able to have the benefits of a secured, safe plastic transaction without the interest, without owing the company and without having to make timely payments. 

If you can’t afford it now, you can’t have it now. you must pay for your own line of credit prior to using.

A Prepaid Visa Credit Card Is Actually Not A Credit Card At All

There are no lines of credit. you will not owe visa in the end. You will have to pay a few small maintenance costs, but in reality it is your personal debit card and visa is like your secured bank. It is an alternative checking account without the fees. 

If you have ever tried to order something from the internet, book a reservation or rent a car, you will be required to give them your credit card information. This prepaid visa credit card suffices and is accepted everywhere a visa is accepted.

Your money is protected against fraudulent activities, you don’t have to carry the cash on you, you can use it to pay your bills and you can upload money onto the card whenever you would like. Do so using cash, bank transfers, or depositing payroll checks onto the card. 

It’s your money and visa brands their name on it with all of these benefits so that you can restore your financial situation and possibly your faith in our economy.