1 Checking vs. Savings Accounts
What is a checking account?
A checking account is meant for everyday use. You can use this account to pay bills, buy groceries, or withdraw cash from an ATM. It comes with a debit card that allows you to easily access your money at stores, online, or through ATMs. Think of it as your main account for spending.
Example
What is a savings account?
A savings account is meant for saving money. This is where you keep funds that you don’t need to use immediately. The key difference is that savings accounts earn interest, meaning, the bank gives you a small amount of extra money over time just for keeping your savings there. It’s a good place for your emergency fund or money you’re saving for future goals, like buying a laptop or going on a trip.
Example
Why do savings accounts earn interest?
Banks use the money in savings accounts to lend to other people (like for home loans). In return, they give you a bit of money as a “thank you” for letting them hold your savings.
