There are two types of bank accounts that a bank provides to its customers. These are checking account and savings accounts. Both these accounts differ on the basis of interest rate, access to money, etc.
Checking bank account is ideal for spending requirement. Savings account offer a high rate of interest and are also ideal for hoarding cash but there is a limit on the number of times you can withdraw money from the account in a month. The key difference to savings and checking account boils down to access money. Let us learn more about it in detail.
Differences between a checking account and a savings account
Checking bank account
Checking account is appropriate for daily transactions like making a purchase, paying bills and withdrawing money from ATM.
Instant access to funds
The instant access to funds offered by this account makes it easy for users to withdraw cash, pay bills, and also perform other basic financial needs of banking consumers. Bank checking accounts provide a plethora of benefits to customers with respect to safety and convenience.
No monthly fee
Another important benefit of a checking account is that these accounts have negligible monthly fees. You can easily get access to countrywide ATM networks. There are a few banks that even provide sign-up bonuses to their customers.
Less interest payable
The only downside of this account is that it gains less interest. The rate of interest that you earn on your investment in this account is only 0.06% that is negligible. Don’t expect to make money by keeping money in this account.
DNDC is a reputed company that provides different types of bank account facilities to its customers. These are a savings account and checking account.
Savings bank account
A savings bank account is a good option for not just storing money but also earning interest on it. The interest rate that you gain on your amount present in this interest bearing account is higher. This makes it a great option to build your corpus and maximize your savings. It is the best option for investors who want to grow their existing capital.
One of the drawbacks of this account is that it prevents users to withdraw money all the time. According to the rules set by the government, a savings bank account customer can take out money via online banking or check for a limited number of times.
The number of allowed free withdrawals is six in a month. Exceeding this limit will result in penalty. If you want to withdraw the amount multiple times from your bank account, then you should convert it into a checking account.
Minimum account balance
Also, there is a minimum amount that has to be maintained in this type of account. If you fail to keep a specified amount in your bank account, then you may have to bear penalty charges.
Checking and savings accounts differ on a variety of factors. Understand your requirement and access these factors to find the best investment option for yourself.