Should you open checking and savings accounts together?
Jan. 22, 2020
3 min read
What we'll cover
Benefits of a joint account
How a joint account could earn more interest
How to use automatic transfers to stay on track
A movie is great on its own, but add popcorn and you have yourself a night. That’s because some things are just better together. Take checking and savings accounts. Each type of account works great on its own, but together they make a personal banking dynamic duo. And while it might not make sense for everyone, (for instance, if you already have a checking account, and you just want to open a savings account), opening checking and savings accounts together can make it easier to keep track of and move your money.
Here’s how opening checking and savings accounts together can make your personal banking tasks a little bit easier.
Both accounts in one place.
Between credit cards, store cards, music subscriptions, online shopping, and more, you have plenty of accounts — with their passwords and usernames — to keep track of. Having your checking and savings accounts in one place can help streamline your everyday banking tasks.
What’s more, when you can take a look at the accounts you access most in one step, you’re more likely to stay on top of things and keep a closer eye on your finances.
Just make sure the bank you choose for both accounts is the right one. A reputable bank is always FDIC-insured. And take note of the terms and conditions of each account you consider, like opening deposit or minimum balance requirements and service fees.
Easy to move money back and forth.
While it’s fairly easy to set up external transfers from one bank to another these days, nothing beats the convenience of transferring between your accounts at the same bank. One reason is that funds for external transfers can often take at least one business day to show up in the destination account.
A transfer from one account to another at the same bank is instantaneous, which makes it easier to access your money when you need it. A well-designed app makes tasks like transfers even more convenient, and some banks even offer voice-activated access designed to work with smart devices like Amazon’s Alexa.
Some banks even allow you to link your savings to your checking account as overdraft protection. Just remember, there is a federal limit of six withdrawals from your savings account each statement cycle.
Earn more interest.
You want to keep a certain amount in your checking account to cover your bills. The thing is, checking accounts aren’t known for paying high interest rates, when they pay interest at all. That’s why you usually don’t want to keep a high balance in your checking account.
The ability to easily move money from your checking to your savings helps you keep as much of your money in savings as you can, ensuring you’re earning the most on your balance. And every little bit counts. Learn about APY (annual percentage yield) and what it means for your savings here.
Stay on track with automatic transfers.
Speaking of savings, if you really want to take convenience to the next level, consider setting up automatic transfers. You know you should “pay yourself first,” but sometimes the money goes before you have a chance to set that savings aside.
Set up automatic transfers from your checking to your savings and you’ll have one less thing to worry about. Your savings balance will grow steadily, and you can even set up multiple transfers to different accounts to help you accomplish your various savings goals.