Should I choose a checking or savings account?
Checking vs. savings account: Which one do you need? Learn when to use a checking or savings account.
Summary
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When choosing between a checking or savings account, think about how you plan to use your money and how often you’ll need access to it.
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Checking accounts make it easy to access your money when you need it, whether you’re swiping a debit card, withdrawing cash at an ATM or banking online.
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Savings accounts help you build your savings by keeping that money separate from everyday spending, and many offer interest to help it grow.
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Using both a checking and a savings account together makes it easier to cover everyday expenses while still saving for what’s ahead.
Sometimes it’s easy to get stuck on a question because you don’t know enough about the pros and cons of one choice versus another. This may be especially true when focusing on finances, particularly when comparing different types of bank accounts. It can seem like a puzzle, right?
One of the most common finance questions is whether to choose a checking account or savings account.
The answer will ultimately come down to how you plan to use your account and the funds you put there.
Do you need regular access to your funds?
Simply put, if you want to deposit money that you plan on regularly accessing for everyday spending, a checking account is the way to go.
“If you anticipate heavy monthly traffic in your account from paying your bills—such as student loans, car loans, credit cards, auto insurance, mortgage—then it’s best to set up a checking account,” says Ogechi Igbokwe, founder of a free personal finance library.
How do you want to access your funds?
When deciding which type of account to open, Igbokwe says easy access to your money is an important checking account benefit to consider.
“Checking account holders have access to online and mobile banking, ATMs and the use of debit cards and checks to make purchases or withdraw funds from the account,” adds Alexander Lowry, a digital finance executive.
Capital One teamed up with MoneyPass and Allpoint to give you more ways to get cash. That means 70,000+ fee-free ATMs are ready when you are.
You can still access online and mobile banking if you open a savings account. And while savings accounts typically don’t allow you to write checks, you can transfer or withdraw your money. It’s easy to move your money between your 360 Checking and 360 Performance Savings accounts whenever you need to.
How much money are you looking to deposit?
Another factor to consider is whether you want your balance to earn interest. Checking accounts are typically designed for everyday spending, so depositing larger amounts of money in a savings account may be a better option for that goal.
It can help you build an emergency fund, prepare for a major financial milestone or work toward another goal while your balance earns interest over time. Savings accounts “are ideal for individuals looking to save while earning interest,” Lowry says.
Whether you’re saving for a down payment or a dream trip, give your balance the boost it deserves with a 360 Performance Savings account, which offers one of the nation’s best savings rates.
Should you use both a checking and savings account?
Many people find that using both types of accounts makes it easier to manage their money and work toward their financial goals.
“Using a savings account can increase your propensity to save,” Lowry says. “On the other hand, checking accounts help you keep better track of what you spend. Thus, the two accounts can work hand in glove to help set you on a better path to financial knowledge and stability.”
Key takeaways: Should I choose a checking account or savings account?
If you decide to open a checking account, make sure you’re familiar with all of its benefits.
“A checking account is a primary tool for managing personal finances,” Lowry says. “Be sure to realize the full opportunity it offers by signing up for direct deposit, signing up for online and mobile banking, taking advantage of alerts and arranging automatic payments.”
If you decide to open a savings account, make the most of it by giving your money a clear purpose. Setting up automatic transfers from your checking account can help you save consistently, whether you’re building an emergency fund, planning a vacation or working toward another financial goal.
Key takeaways
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Checking and savings accounts each serve a different purpose. Using the right account for the right job can make it easier to stay organized and manage your finances.
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The best account depends on how you plan to use your money. Frequent spending is typically easier with a checking account, while money you want to set aside may be better suited for a savings account.
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You don’t have to choose just one. Many people have both checking and savings accounts as part of a balanced approach to achieving their financial goals.
You can open a 360 Checking or 360 Performance Savings account online in about 5 minutes.