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You’ve probably heard of checking and savings accounts, but have you ever wondered what the difference is between the two? First, let’s start with the easy one: the savings account. Just like the name says, this account is for SAVING. A savings account is a place to set money aside for when you really need it. The money in this account will then earn interest. Having a savings account helps you prepare for the future and the unexpected.
A checking account, on the other hand, is your spending or transaction account. This account is designed as a place for your money to land for a short period of time before ‘sending’ it to the next place. For example, your paycheck likely goes into a checking account where it sits before you pay for things like rent, groceries, a phone bill, or takeout. The money in this account cycles much faster, so it normally does not earn interest.
In most instances, it makes sense to have both a savings and a checking account. You can even transfer money back and forth between the two! Consider how easy it can be to transfer a percentage from your checking (spending) account over to your savings account each month to help you save.
Do you still have questions on the difference between a checking and savings account? Or are you unsure which one is best for you? Visit our personal banking page or give us a call at (800) 235-5331. We’d love to help you!
F&M Bank – banking that feels right. Member FDIC.