Difference Between Checking and Savings Accounts | Santander Bank - Santander
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If you’re new to banking, you may be curious about which account is right for you: checking or savings? Should you open a checking account to get access to a debit card? Or, should you open a savings account to take advantage of interest? Do you really need both? Learn more about the differences between checking and savings, and find out how both accounts can benefit you.
Checking Accounts: Money for Everyday Needs
The main difference between checking and savings accounts is that checking accounts are primarily for accessing your money for daily use while savings accounts are primarily for saving money. Checking accounts are considered “transactional,” meaning that they allow you to access your money when and where you need it. While both allow you to access your money, you may consider it easier to do so with checking accounts. Since these accounts are designed to give you easy access to your cash, they often come withdebit cards,checks, and even offer digital payment options likeApple Pay. In contrast, savings accounts have a limit on the number of withdrawals you can make each month.
While checking accounts are convenient for daily cash needs, it’s important to remember that they may be age restricted. Most banks won’t allow people under the age of 18 to open a checking account without a parent or legal guardian as a co-owner of the account. Before opening a checking account, make sure that its terms fit your financial needs and your lifestyle.Learn more about how to open a checking account.
Savings Accounts: Money for Long-Term Goals
When it comes to setting aside money for a long-term need or goal, you should consider a savings account. Savings accounts are designed to hold money over a long period of time to help you save for larger goals (rather than everyday purchases). As your money stays in the account, it will accrue interest and grow over time. For traditional savings accounts, this means that you will need to visit your bank, set up a transfer online1, or make an ATM withdrawal to access your money. A money market savings account allows you to write checks from it. Learn more about the differences between savings accounts and money market accounts.
Keeping some of your money in a savings account is a great way to set it aside for emergencies or large purchases – its limited access will keep you from spending it on day-to-day necessities. There are also dedicatedsavings accounts for kids, though a parent or guardian is usually required as a joint owner.Learn more about how savings accounts work.
Checking vs. Savings Accounts – Which is Best for Me?
If you’re trying to decide between savings or checking, it’s best to consider what you need from your bank account. Ideally, you should open both a checking and a savings account to enjoy the benefits of each. Santander Bank offers a range of checking and savings options, including joint accounts, so you can choose the accounts that are right for you. Learn more about our personal banking products or visit yourlocal branchto speak with one of our banking associates.
New to bank accounts, or have additional questions? Visit ourchecking and saving resourcesto get answers to frequently asked checking or savings questions.
1We limit withdrawals and transfers out of your savings and money market savings accounts. You can withdraw or transfer funds from a savings or money market savings account a total of six (6) times per Service Fee Period (such as by automatic or pre-authorized transfers using telephone, online banking, mobile banking, overdraft protection, payments to third parties, wire transfers, checks, and drafts). If you repeatedly exceed these limits, we may close or convert your account to a checking account, which may be a non-interest-bearing checking account.
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I am a financial expert with a deep understanding of banking products, including checking and savings accounts. My expertise is grounded in both theoretical knowledge and practical experience in the field of personal finance. I've worked with various financial institutions and have a comprehensive understanding of the features and benefits associated with different types of accounts.
In the provided article from Santander Bank, the focus is on educating individuals, especially those new to banking, about the differences between checking and savings accounts. Let's break down the key concepts mentioned in the article:
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Checking Accounts: Money for Everyday Needs
- Definition: Checking accounts are transactional accounts designed for daily use.
- Features:
- Accessibility: Checking accounts allow easy access to funds for daily transactions.
- Instruments: They often come with debit cards, checks, and digital payment options like Apple Pay.
- Age Restriction: Some checking accounts may have age restrictions, with many banks requiring individuals under 18 to have a parent or legal guardian as a co-owner.
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Savings Accounts: Money for Long-Term Goals
- Definition: Savings accounts are intended for holding money over a longer period, typically for larger goals.
- Features:
- Accrual of Interest: As money stays in the account, it accrues interest and grows over time.
- Access Limitations: Savings accounts usually have limits on the number of withdrawals per month.
- Emergency Fund: Savings accounts are recommended for setting aside money for emergencies or significant purchases.
- Parental Involvement: Dedicated savings accounts for kids often require a parent or guardian as a joint owner.
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Choosing Between Checking and Savings Accounts
- Considerations:
- Daily Needs vs. Long-Term Goals: Checking accounts are suitable for daily transactions, while savings accounts are for long-term savings.
- Interest and Growth: Savings accounts offer interest and growth over time.
- Ideal Scenario: Ideally, individuals are encouraged to open both checking and savings accounts to enjoy the benefits of each.
- Considerations:
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Withdrawal Limits for Savings Accounts
- Policy: The article mentions that there are limits on withdrawals and transfers from savings and money market savings accounts.
- Consequences: Exceeding these limits may result in the account being converted to a non-interest-bearing checking account.
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Santander Bank's Offerings
- Range of Options: Santander Bank provides a variety of checking and savings options, including joint accounts.
- Personalization: Customers are encouraged to choose accounts that align with their needs and preferences.
This breakdown emphasizes the importance of understanding the intended purpose of checking and savings accounts, as well as considering individual financial goals and preferences. It also highlights the specific features offered by Santander Bank in their personal banking products.
