What is a checking account and how is it different from a savings account?

A checking account and a savings account are two of the most common types of bank accounts used for managing personal finances. A checking account is a transactional account that is used for everyday spending and bill payments. Checking accounts typically come with a debit card or checkbook that allows you to access your funds easily. These accounts often have low interest rates or no interest at all.

On the other hand, a savings account is designed to help you save money over time. Savings accounts typically offer higher interest rates than checking accounts, but may have limits on how often you can access your funds. Some savings accounts are designed for specific savings goals, such as a down payment on a house or a vacation. They may offer higher interest rates or other incentives to encourage saving.

One major difference between checking and savings accounts is the way they are used. Checking accounts are for day-to-day transactions, while savings accounts are for long-term savings goals. Another difference is the interest rate: savings accounts offer higher interest rates than checking accounts, allowing you to earn more money on your savings over time. Finally, savings accounts may have more restrictions on withdrawals than checking accounts.