What is the difference between checking and savings accounts? Knowing when to use each can be especially important for tweens and teens who are getting their first bank account in the near future. Or maybe they could use some help figuring out what to do with their newly opened accounts. Below, learn about checking vs. savings accounts, and Download our free Google Slideshow Which breaks down the basics of both accounts.
What is a checking account?
- A checking account is a bank account used to hold money for everyday purchases.
- Checking accounts allow you to keep money safe for everyday purchases and access funds through online banking.
- When paying with a debit card or check, the funds come from a checking account.
What is a savings account?
- A savings account is a bank account used to save money for long-term goals.
- Savings accounts usually offer interest and allow your money to grow as you wait to use it at a later date.
- Some banks may limit the number of monthly withdrawals from savings accounts.
Key Differences Between Checking and Savings Accounts:
You should put money in a checking account for everyday transactions, while you keep money in a savings account for long-term savings. Funds in a checking account are easily accessible using a debit card, check, or ATM. Usually, you need to transfer money from a savings account to use it. Additionally, savings accounts may pay interest, or allow your money to grow, when the accounts are not checking.
To know more about this key difference, Download our free Checking vs. Savings Account slideshow!
When should each account be used?
Checking accounts are best used for everyday purchases including food, gas and everyday purchases, as well as paying bills or receiving direct deposit. Savings accounts, on the other hand, should be used to deposit money you want to use down the road, or to keep surplus cash safe.
What are the benefits of checking and savings accounts?
Opening these accounts allows you to access your money through mobile apps or online banking. Easy to check balance and transfer funds at your fingertips. Additionally, checking accounts allow ATM withdrawals, debit card transactions, direct deposits and cash back where it is offered. An added benefit of savings accounts is the opportunity to earn interest. Funds in savings accounts may grow over time depending on the interest rate of the account offered by the bank.
Are checking and savings accounts safe?
The short answer is yes! Insurance covers your deposit up to $250,000, giving you peace of mind that your cash is accounted for. The Federal Deposit Insurance Corporation, known as the FDIC, regulates banks so that if a bank fails, your money is safe. In addition, the National Credit Union Administration Regulates credit unions.
Which account should I open?
Decide: Are you currently putting money in the bank for day-to-day purchases or saving money for long-term purchases? In most cases, it’s a good idea to open both a checking and a savings account. It allows you to keep money for your daily purchases in a checking account and save for your long-term goals and keep extra funds safe in a savings account.
How do I open a bank account?
You can open your account at a local bank or online. You will usually need an ID and your basic personal information. Remember, if you are under 18, you must be accompanied by a parent. Before choosing a bank, do some research on minimum balance requirements, any monthly fees and interest rates.
Get our free slideshow! Here it is covered:
- Introduction to Checking and Savings Accounts with Definitions
- key difference
- When each account should be used
- Scenario activities for small-group or independent practice
- Two departure ticket slides to check for understanding
How can I use slideshows in my classroom?
- Use the provided Google slides and speaker notes to guide you through this mini-lesson
- Taking approximately 30 to 45 minutes, this is the perfect lesson to use during any curriculum!
- Introduce students to the basics of checking and savings accounts and have them complete the scenario activity.
- Then, students can work through two exit ticket activities to reinforce their learning.