Of the various types of bank accounts you can keep your money in, checking and savings accounts are some of the most common. These basic types of accounts can be essential for managing your money day-to-day. But although checking and savings are very different types of accounts, they are often used together. Here are a few guidelines for choosing when to put your money into one or the other.
Checking accounts. Checking accounts are most often used for easily depositing money and withdrawing it when you need it. Most checking accounts allow you either to write a check or use a debit card for the amount of money you need to withdraw at any given time. Many people have their paychecks directly deposited into their checking account, so they can immediately have funds available without making a trip to their bank. Several common checking account features make it easy to make purchases and pay bills online, as well as check balances and keep track of spending.
Savings accounts. Savings accounts, on the other hand, are not primarily used for spending. You can use a savings account to store away funds for emergencies, build toward a major purchase like a car or home, or save up for an upcoming expense such as tuition. The goal is not to spend the money in your savings account, but to keep it on hand in case you need it quickly. A savings account usually can be linked to your checking account to easily transfer funds or to cover the difference in case of an overdraft.
Interest earned on checking vs. savings. Some checking accounts do not pay interest, and those that do may require a higher opening deposit or minimum balance to be maintained in order to avoid a fee. Savings accounts generally pay interest, though the interest rates vary across different banks.
Checking or savings account requirements. Different banks offer various types of checking and savings accounts. Some may require a minimum deposit to open an account or a minimum balance in the account at all times to avoid a fee. Many banks also require monthly fees for various reasons.
The Ally Bank difference. Ally Bank offers competitive interest rates for both checking and savings accounts. We don't charge monthly maintenance fees and there's no minimum balance to open. And with our Interest Checking account, you can use any Allpoint no-fee ATM—plus receive up to $10 reimbursement for fees charged at other ATMs nationwide each statement cycle.
At Ally Bank, we are committed to making saving as easy, secure, and rewarding as it can be. Learn more by visiting Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.