Types Of Bank Accounts: Which One Should You Have?

Written by Banks Editorial Team
3 min. read
Written by Banks Editorial Team
3 min. read

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You want to open a bank account soon but aren’t sure which type is best. Should you go for a checking account, savings account or both? It depends on the purpose the account will serve and your money goals. 

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What is a Checking Account?

A checking account is a type of bank account offered by traditional banks, credit unions, online banks and some financial technology platforms. 

How Do Checking Accounts Work?

They’re primarily used to make everyday purchases at retail locations and online using the debit card it comes with. You can also access the funds in your account by writing a check or making withdrawals using ATMs. 

Checking accounts are also used to receive direct deposits. Plus, you can initiate cross-account transfers or send funds to accounts belonging to yourself or someone else that isn’t housed at your financial institution. 

What is a Savings Account?

Savings accounts are available from the same financial entities as checking accounts. However, they’re designed to store funds for an extended period. 

How Do Savings Accounts Work?

When you deposit money into a savings account, you’ll generally earn a return after it sits for an extended period. This is known as the annual percentage (APY), but it’s usually on the lower end unless you open a high-yield savings account. 

Also, keep in mind that you can’t use checks or debit cards with savings accounts. Instead, you’ll need to request an ATM card to make withdrawals, initiate a transfer online or visit a local branch. Still, most financial institutions limit withdrawals to six each month before fees are assessed, making savings accounts ideal for individuals who are looking to store money away so it can grow. 

The Difference Between a Checking and Savings Account

Main Purpose

  • Checking account: receive direct deposits, pay bills and make everyday purchases
  • Savings account: grow your money over an extended period

Withdrawal and Transfer Limits

  • Checking account: none
  • Savings account: six per month (withdrawals)


  • Checking account: minimal, if any
  • Savings account: varies by the financial institution

Maintaining Balance

  • Checking account: varies by the financial institution
  • Savings account: varies by the financial institution
Earn 4.00% APY on your Savings

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  • Checking account: monthly maintenance fee, ATM fee (if you withdraw funds at an out-of-network ATM), overdraft fees and NSF fees 
  • Savings account: monthly maintenance fee, ATM fee (if you withdraw funds at an out-of-network ATM), excessive withdrawal fee, minimum balance fee (if your account falls below the specified threshold)


  • Checking account: spending and withdrawals up to your balance are permitted, but daily spending limits apply
  • Savings account: six fee-free withdrawals per month

Other Features

  • Checking account: debit cards, paper checks, online bill pay, direct deposit, mobile banking with remote check deposit, overdraft protection
  • Savings account: direct deposit, mobile banking 

How to Choose Between a Checking or a Savings Account

When deciding if a checking or savings account is best, here are some questions to ponder: 

  • What will be the primary purpose of the account? 
  • Is it a must that you earn interest on your money?
  • Do you need access to a debit card? 
  • Will you be using the account to make purchases, pay bills or both? 
  • How many withdrawals do you plan to make per month? 

When to Get a Checking Account

A checking account could be best if: 

  • You want to shop online or at stores using a debit card to make everyday purchases. 
  • You want to pay bills by check or electronically. 
  • You will likely need to make more than six withdrawals per month. 

When to Get a Savings Account

You may want to open a savings account instead if: 

  • You want to build an emergency fund.
  • You’re looking to save up to meet a long-term financial goal.
  • You want to save up and make a big-ticket purchase in the future. 

When to Have Both

If you’re looking for a way to more effectively manage your income and grow your money, both a checking account and a savings account could be sensible: Be sure to find financial entities that offer incentives to new account holders. It’s equally important that you can access their services without racking up a ton of fees. 

Easily Open a Checking and Savings Accounts

With so many traditional banks, online banks and credit unions to choose from, it can be overwhelming to identify the best options. Luckily, financial technology companies like Current (*) simplify the decision-making process by offering banking solutions and different types of bank accounts that are too good to pass up.

When you open an account with Current, you’ll enjoy a host of features designed to make your money work harder for you. Beyond the 4.00%APY you can earn on savings (1) , you’ll also get overdraft protection of up to $200 (2) , direct deposits two days sooner (3) , cash back incentives and added protection, so you’ll know your funds are safe and in good hands. 

Want to learn more about Current and how becoming a member can help you upgrade your finances? Visit the website or download the mobile app today to learn more. Or you can sign up for a free membership in less than two minutes and begin taking advantage of all the member incentives today.


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The Annual Percentage Yield ("APY") for Current Interest is variable and may change at any time. The disclosed APY is effective as of January 1, 2022. No minimum balance is required. Must have $0.01 in savings pods to earn Current Interest on up to $2000 in deposits per Savings Pod up to $6000 total.  Please refer to Current Interest Terms and Conditions.


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