Last Updated on March 9, 2024
Did you recently acquire some money? Whether you earned it, won it, or it was gifted to you, you may be wondering whether to put it in a checking vs savings account.
There’s no universally correct answer. Your best option is going to depend on what you plan to do with that money.
Start by addressing the following questions.
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Are You Down With Paying Fees?
It might seem ridiculous to have to pay fees to keep your money in a bank. But when you have a checking account, you’ll likely be shelling out some extra dough for this privilege. There are ways around this, however.
For instance, if you maintain a minimum required balance, set up direct deposit from your employer, or make a minimum number of transactions each month, you can wave those fees.
So when searching for a bank to set up a checking account, look for one that offers simple ways to waive the fees. If they offer fee-free nationwide access to ATMs and a sign-up bonus, even better!
If you absolutely don’t want to pay fees, you can stick with a savings account. Most savings accounts are free of fees, provided you don’t exceed your withdrawal limits. But there are other disadvantages as well. Which brings us to the next question.
Will You Need to Pay Bills?
If you’re hoping to pay monthly on your student loans or some high-interest credit cards, you can’t do it with a savings account. Transactions are typically only possible with a checking account such as you might get at https://www.farmersbankidaho.com/.
With a checking account, you can set up online banking and automatic bill pay to pull money right out of your account when it comes time to pay your rent or utility bills. It’s also possible to make one-time payments as well.
Do You Want a Debit Card?
The point of a checking account is to enable you to make frequent transactions with a debit card, chequebook, and mobile app. It’s a convenience – which is part of the reason there are the aforementioned maintenance fees.
Debit cards are incredibly convenient. They can be used as credit cards, but draw money directly from your account.
If you’re the rare person who pays for everything with cash and has no need for a debit card or chequebook, then put all your funds into a savings account. Just be prepared to make withdrawals by requesting them over the phone or going into the bank.
Are You Hoping to Make Money on It?
Checking accounts will typically earn you little to no interest. On the other hand, savings accounts always accrue interest.
In the event that you simply want to store and build your money, a savings account is the best way to go.
Have You Settled the Checking Vs Savings Account Argument?
When you get right down to it, the whole question of checking vs savings account may not require a choice at all. You can do both.
With a little research, you can find a bank that offers a solid interest rate on your savings account while waiving the fees on your checking account. Then you’ll get the best of both worlds.
And for more great articles that’ll pique your interest on a wide variety of topics, keep checking back with us!
