Which is cheaper, checking or savings accounts?

Savings accounts tend to charge lower fees overall. But you can open both accounts cheaply.

Which is safer, checking or savings accounts?

They're both FDIC insured and protected by standard bank encryption. So you're probably safe from hackers and bank failure. But checking accounts have one weakness: debit cards. If your debit card is stolen, the thief could drain your account. Federal law protects you somewhat, but you must report stolen debit cards quickly to avoid charges.

When is a checking account better than a savings account?

Checking accounts are better than savings accounts when you need to make everyday purchases from the account. Checking accounts let you withdraw money as often as you want. Some savings accounts limit your spending.

When is a savings account better than a checking account?

A savings account is better than a checking account when you want to save up for medium-term goals or build emergency savings. Savings accounts pay more interest than checking accounts, generally speaking.

Checking Account vs. Savings Account: Which Should You Pick?

Updated May 16, 2024

By: Kailey Hagen and Cole Tretheway

Our Banking Experts

Fact Checked Ashley Maready

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

More than 9 out of 10 American adults have either a checking or a savings account. The benefits are obvious: easy money transfer and storage. Checking and savings accounts are the peanut butter and jelly of personal finance: useful separately, but best when paired.

But when should you open a checking account vs. a savings account? We'll break it down.

What is a savings account?

Savings accounts help you store money you may need in the next one to five years or so. People open them because they earn you higher APYs on deposits than checking accounts. But savings accounts may limit withdrawals.

Pros of savings accounts

Higher interest rates: Savings accounts typically offer much higher interest rates than checking accounts. Online banks tend to offer the highest rates. The best high-yield savings accounts offer rates around 10 times higher than the national average.

Low minimums: Savings accounts typically require low minimum deposits, if any. Think $100 or less to open an account. (It's still "your money," but you must keep it in the account.)

FDIC insurance: Like checking accounts, savings accounts are also usually FDIC insured up to $250,000 per person per bank.

Cons of savings accounts

Withdrawal and transfer limits: Savings accounts limit you to six convenient withdrawals per month, according to Regulation D.

Feature limits: Savings accounts offer fewer features than checking accounts. It's tougher to find savings accounts that offer debit cards and check-writing capabilities.

Compare savings rates

Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.

Account	APY	Promotion	Next Steps
Open Account for SoFi Checking and Savings Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	up to 4.60% Rate info Min. to earn: $0	New customers can earn up to a $300 bonus with qualifying direct deposits!	Open Account for SoFi Checking and Savings
Open Account for CIT Platinum Savings Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	5.00% APY for balances of $5,000 or more Rate info Min. to earn: $100 to open account, $5,000 for max APY	N/A	Open Account for CIT Platinum Savings
Open Account for UFB Secure Savings Account Member FDIC. Rating image, 4.00 out of 5 stars. 4.00/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	5.25% Rate info Min. to earn: $0	N/A	Open Account for UFB Secure Savings Account

What is a checking account?

Checking accounts help you spend and store money you might need tomorrow. They usually give you multiple deposit and withdrawal options so you can add and withdraw funds easily. Money kept in your checking account earns you little interest, if any.

Pros of checking accounts

Convenience: Banks and credit unions give you several ways to move your money in and out of your checking account, including:

Few limitations: Checking accounts generally let you withdraw funds as often as you want. Savings accounts are typically more limited (see below).

FDIC insurance: All the checking accounts at top banks are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per person per bank. That means if your bank goes under, the FDIC will reimburse your lost funds up to a maximum of $250,000.

Cons of checking accounts

Little to no interest: Checking accounts typically don't pay you money for hoarding cash in them. If they do pay you, it's probably not much compared to top-tier savings accounts.

Fees: Checking accounts typically charge more fees than savings accounts. (They're more feature-rich.) Here are a few common checking account fees:

Monthly maintenance fee: A monthly fee you must pay to keep an account open. Many online banks don't charge these. Banks that do charge maintenance fees typically waive them if you meet certain criteria, like by setting up direct deposits to your account.
ATM fees: You must pay ATM fees to use out-of-network ATMs. These are typically $2 to $3 per withdrawal. ATM owners may charge you additional out-of-network fees.
Minimum balance charge: Some checking accounts charge you $10 to $12 if your balance drops below a certain amount.
Foreign transaction fee: If you use your debit card outside the United States, you could incur a foreign transaction fee. This often adds 3% to your purchase. Some banks charge you foreign transaction fees for banking with non-U.S. merchants, no matter where you are when you make the purchase.
Overdraft fee: Your bank may charge you $35 or so for attempting to withdraw more money than you have stashed in your checking account. Overdraft fees are typically charged by traditional brick-and-mortar banks.

Checking account comparison

We recommend comparing checking account options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of standout accounts.

Account	APY	Promotion	Next Steps
Open Account for Discover® Cashback Debit Member FDIC. Rating image, 4.00 out of 5 stars. 4.00/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	0% Min. to earn: N/A	Earn 1% cash back on up to $3,000 in debit card purchases each month (see details when you click 'Open Account')	Open Account for Discover® Cashback Debit
Open Account for SoFi Checking and Savings Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	0.50% Rate info Min. to earn: $0	Cash bonus up to $300 with direct deposit set up (see details when you click 'Open Account')	Open Account for SoFi Checking and Savings
Open Account for Axos Bank Rewards Checking Member FDIC. Rating image, 4.25 out of 5 stars. 4.25/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	0.40% (up to 3.30%) Rate info Min. to earn: Monthly direct deposits totaling at least $1,500	Use the promo code AXOS300 when you apply for a Rewards Checking account by June 30th, 2024. Then have qualifying direct deposits to earn up to a $300 bonus!	Open Account for Axos Bank Rewards Checking

Saving vs. checking account: which should you pick?

Most Americans should consider opening one of each. The cheapest are essentially free and they cover different bases. Checking accounts help you cover everyday expenses, and savings accounts help you build medium- or long-term wealth.

Some online banks even offer a combined checking and savings account. Basically, it's a one-for-two combo. It's typically free, basic, and simple to manage from your smartphone. I like this because you can manage your money in one place, from a single screen.

Determined to stick with one account only? Okay. Chances are, you want to open a checking account. Checking accounts are the more flexible of the two, and they're great for managing money you may need tomorrow. Some even offer you interest on deposits.

But if you're okay with potentially facing limits on withdrawals, you should consider opening up a savings account instead. Savings accounts offer the best rates. They're great for building emergency funds and meeting medium-term goals.

The Ascent's best savings accounts

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. The Ascent's top savings account picks can earn you more than 10x the national average savings account rate.

Best Savings Accounts

Still have questions?

Here are some other questions we've answered:

FAQs

Savings accounts tend to charge lower fees overall. But you can open both accounts cheaply.
They're both FDIC insured and protected by standard bank encryption. So you're probably safe from hackers and bank failure. But checking accounts have one weakness: debit cards. If your debit card is stolen, the thief could drain your account. Federal law protects you somewhat, but you must report stolen debit cards quickly to avoid charges.
Checking accounts are better than savings accounts when you need to make everyday purchases from the account. Checking accounts let you withdraw money as often as you want. Some savings accounts limit your spending.
A savings account is better than a checking account when you want to save up for medium-term goals or build emergency savings. Savings accounts pay more interest than checking accounts, generally speaking.

Our Banking Experts

By: Kailey Hagen

Writer

Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what's almost a farm in northern Wisconsin with her husband and three dogs.

By: Cole Tretheway

Cole Tretheway is a full-time personal finance writer whose articles have been featured on The Ascent and The Motley Fool. He has a degree in English with a Certificate in Professional and Technical Communication from California Polytechnic University, SLO.