Difference Between Checking and Savings Account

The Modern Banking system came into existence in the year 1587 in Venice. It was established by the traders to facilitate the deposit of money which comes through their trade businesses.

Over time, banking policies changed in certain countries.

It started functioning as a financial media or an intermediate entity that accepts deposits and invests the money for lending thereby offering interest rates for the people who deposit funds as well.

It is from then on, named for safeguarding, transferring and lending money. The banks later categorized the accounts into two types; checking and savings account.

People choose from the two depending on their requirements. Indeed, financial experts also advise the same to the customers to choose the account based on need.

Checking and savings account functions in the same fashion internally, there are many differences between the two in terms of functionality.

Checking vs Savings Account

The main difference between checking and savings is that based on the customers need, a checking account is designed as a bank deposit scheme that can be used for day to day money transactions, whereas a savings account, as the name suggests is meant to deposit money on a long term to save it for future needs.

Checking vs Savings Account


Comparison Table Between Checking and Savings Account (in Tabular Form)

Parameter of ComparisonChecking AccountSavings Account
Meaning/DefinitionChecking account is a category of bank deposit account which is used for day to day money transactions.A savings account is a category of bank deposits that are used for long term savings purposes.
Money Withdrawal restrictionsThe checking account has no restrictions as such.The savings account has withdrawal limits in several times withdrawals are made per month. It may differ from bank to bank.
Interest CriterionChecking account does not earn any interest, if at all banks offer interest it is very lessA savings account is meant for interest-earning too. The longer the money is in the savings bank account, more is the interest earned by the customer
Access of the account for the moneyChecking accounts can be accessed anytime.The money has to be transferred to the checking account for any access.
Other benefits and featuresChecking account has many added features like debit card access, online transfer of funds to external accounts, Automatic bill payThe savings account has no facilities or benefits except for transferring funds to the connected checking account.


What is Checking Account?

Checking account is a category of bank deposits where the money is used for day to day transactions.

Checking account generally does not earn any interest, even if any bank pays interest it will be very nominal and considered less.

The checking account comes up with many additional benefits and facilities. It comes with a debit card that can be used to access money to withdraw or for any card-based purchases in-store or online.

Banks do not impose any restrictions on withdrawals for checking bank account. Banks, at the same time, require the checking bank account holders to meet certain criteria if not a fee is levied.

Checking account holders are expected to maintain a certain money balance in the account. Addition to it, there must be a minimum transaction to have happened from the account too.

The checking account comes with an online transaction option to any external bank accounts. An automatic bill pays for utilities can be easily done using a checking account.

A financial expert advises the customers to check if the money that is in the checking account is under insurance guidelines before opening an account in the bank.

Checking accounts are generally transactional account which can be used for expenditures.

checking account

What is Savings Account?

A savings account is a category of bank deposit which is aimed at saving money for the long-term. A savings account does accrue interest, the longer the time the money is in the savings account, the more the interest earned.

A savings account is considered to be an investment for the future. In a way, the customer offers the bank to access the money for their lending purposes by which they pay the customer interest for the amount deposited.

It is widely observed that savings account is mostly no-fee account.

There are no unwanted charges or fees are charged as long as the money is in the bank account, however, banks charge account maintenance fee and few banks also expect a minimum balance to be maintained in the account too.

A savings account does not come up with any facilities like a debit card. The only online transaction that can be done is to the checking account that is connected to the savings.

The design of the savings account is in such a way that it is harder to spend money.

If at all to be spent, the money has to be transferred to the checking account and then spend; this must also fall under the limit of the online transaction to the checking account.

A savings account may not be yielding higher rewards in a shorter duration. Financial experts advise holding a good amount of money in the savings account for a longer period to earn good rewards in the form of interest.

savings account

Main Differences Between Checking and Savings Account

  1. Although both are designed to hold money in the bank, the main difference between a checking and a savings is, a checking account is a type of account where the money is deposited for day to day transactions, while a savings account is meant for long-term savings.
  2. Checking accounts may not earn any interest if at all earned it will be very minimal. A savings account is a long term investment, it does earn interest and the best part is longer the money in a savings account, greater is the interest.
  3. Checking accounts does not have any limits in the withdrawal of money, whereas there are strict restrictions on the withdrawal of money from a savings account.
  4. Checking account incurs any fees, it is expected of the customer to hold a minimum balance as well minimum transaction if not a fee will be charged. A savings account does not incur any such charges except for account maintenance fee which is levied every year.
  5. Checking accounts comes up with many benefits like debit cards, online transactions to external bank accounts and an overdraft. A savings account does not come up with any of these facilities.
Difference Between Checking and Savings Account



Checking and Savings account go hand in hand if a person is planning for a safe future.

Though on the outset, checking account has man benefits than the savings account, opting for checking account alone is not wise.

Checking account lures to spend while savings account restricts you to spend and helps you save money for the future. Understanding the banking rules and interest policies makes life easier while opening an account.

it is prudent to save any extra money in the savings account as it accrues interest. The choice of life is to manage money and not the other way.

Key Differences Between Checking and Savings Account (PDF Format)

Download the key differences in .PDF format, to read or print them later:

Difference Between Checking and Savings Account



  1. https://www.bostonfed.org/-/media/Documents/neer/neer299a.pdf
  2. https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich197811.pdf
  3. https://journals.sagepub.com/doi/abs/10.1177/0891242402239199
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