Dear hivers

A lot of people feel that they don’t need a checking account. So, what happens is, they just open a savings account. It’s not uncommon for people to have as many as three savings accounts! But do you need a checking account?

Besides, what is the difference between savings account and checking account?

Savings Account
The main objective purpose of a savings account is to save money. As simple as that. It’s debatable though if you are really saving money when you put it in a savings account. After all, the interest rate is so low, you might as well just keep your money and put it under your bed! Usually, though savings account are helpful for you to designate some money for particular items, like a computer, a mountain bike, or a vacation you’re planning.

Checking Account
There are many ways that a checking account is different from a savings account. For one, you can write and issue checks from your checking account. This feature comes in very handy if you need to pay bills or purchase some big ticket items. It can be an alternative to credit cards. Actually, some checking accounts even come with a Debit Card.

There are no restrictions as to the number of withdrawals per month. You can issue as many checks as you want, provided that your balance can cover your checks. You can also withdraw as many times as you want! Some savings account have daily and monthly withdrawal caps. If you are engaged in business, a checking account definitely comes handy in managing your finances.

Most of the time, checking accounts do not pay interest on your money. But you should check with individual banks. Some banks now pay interest rates on checking accounts.

Banks usually charge a monthly maintenance fee. But be sure to check with your bank, because these fees may sometimes be waived. There are also fees you need to pay in case you overdraft, or if your account falls under the minimum balance, you may also need to pay some fees.

So, which account is for you?
Well, it depends! What are your goals anyway? What deposit products do you need? How often do you withdraw money? Do you have a business and you may withdraw money several times a month?

These are just several questions you need to answer to decide. Either way, a checking account may provide flexibility in managing your finances and paying for bills and other recurring items.

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