Checking vs. Savings Account
Checking and savings accounts play a significant role in our lives. Both offer people a safe place to store and access their funds, but they’re often used for different purposes. This article will discuss the differences between savings and checking accounts, when and how to use each one, and the types of accounts ALLIANCE offers.
Checking Account
These accounts are meant to be used for making payments and moving money. Checking accounts would be for your day-to-day transactions, including spending, deposits, bills, and withdrawing cash. These accounts tend to earn less interest than savings however, they do not have a limit on the number of transactions that can be made. It would be beneficial to open a checking account for your daily transactions.
Savings Account
As you would imagine, a savings account is used for saving. A saving account's primary purpose is to store your money and gain interest over time. These accounts sometimes limit how often you can make transactions but have higher interest rate payouts than checking accounts. When you consider opening a savings account, you need to consider these factors.
Best Uses for a Checking Account
First, checking accounts are used for consistent transactions and offer you many choices on how to access your funds. With checking accounts, it is crucial to maximize your money by avoiding fees associated with these accounts.
Setting up automatic payments is a tremendous benefit of checking accounts and can ensure you never pay a late fee on your bills again. You can also pay yourself by setting routine transfers from your checking to savings, allowing your spending and saving to be automatic.
At ALLIANCE, we believe you should not have to pay to access your money. Accounts such as our Opportunity, Junior, and Performance Checking offer free ATM rebates on out-of-network ATMs. There may come a time when you cannot stop to grab cash from your financial institution’s ATM, and this benefit can save you from an ATM fee.
Setting up direct deposit is just another great benefit of having a checking account. This ensures you receive your paycheck directly into your account in the fastest and most convenient manner.
Best Uses for a Saving Account
Saving accounts are intended to help you reach your financial goals, and knowing the different features offered by these accounts is vital.
Avoid opening accounts with a monthly service fee. If you are trying to save your money, paying just $5 in fees a month will be $300 you will not have in 5 years. When saving, every dollar counts.
The interest rate, or annual percentage yield (APY), on your savings account is essential and can be worth changing your financial institution. Depending on the account and institution, a minimum balance to incur interest may be required, so make sure you are meeting these requirements. Consider looking to alternative accounts or institutions if the requirements are complicated and unreasonable.
Envelope saving was how people used to save money to reach each individual saving goal they had. Today, opening multiple saving accounts for your savings goal is the new envelope saving. Supplemental saving accounts allow you to have saving accounts for vacations, maybe one for home renovation and another as an emergency fund. No matter what you are saving for, doing this will allow you to see the progress of each savings goal.
ALLIANCE Checking and Savings
At ALLIANCE, we have six types of checking accounts to suit you or your family's needs, along with different saving options to help you reach your financial goals. To learn more about how ALLIANCE can provide the best service for your financial needs and to view all of our checking and savings options, click the links below.
Also, feel free to stop by any of our seven branch locations across Lubbock or call us today at 806-798-5554 with any questions.
