No doubt you might have heard about Checking and Savings Account couple of times. Students, workers and business men/women alike come across these two words whenever they need to open a bank account.
Yes Checking and Savings Account are types of bank account. It is not uncommon to visit a bank and request for a bank account and the banker asks you” Checking or Savings Account”?.
But there are some key differences between these two types of accounts. This article will focus on the differences between these two accounts. It is best you fully understand the differences to enable you make your decision when getting a bank account.
Major Difference Between Checking and Savings Account
Checking account can also be known as Transaction Account, Current Account and in some countries Business Account. Having known this what then are the major differences between these types of Bank Accounts.
1. Mode Of Operation
Lets consider how these two types of Bank Accounts operate. Savings Account is meant basically for Saving your money. While Checking Account(Current Account) is meant for daily transaction. This means that while you expected to save money in your savings account, your Checking Account(Current Account) is expected to be performing daily transaction.
2. Account Holders
Another major difference can be coined from the holders of these accounts. Checking Accounts are owned by mostly Business Owners, Government workers, MDs and CEOs. But Savings Account on the other hand are mostly owned by students.
Please note that Owners of Checking Accounts(Current Account) can also own Savings Accounts but most Savings Account holders are not qualified to owned a Checking Account. So if you don’t have a business or you don’t have a steady flow of income then Savings Account is probably best for you.
3. Cost Of Maintenance
Checking Accounts(Current Accounts) attract a higher cost of maintenance. Reason because money can be deposited and removed almost anytime. Another reason is that it also provide some facilities that is not available for Savings Account holders.
For example Checking Accounts allows for a third party withdrawal.This means that i cheque(check) can be issued to second person and cashed out by a third person. Savings Account holders do not enjoy this privilege.
4. Interest Rate
There is no doubt that the interest rate between Checking and Savings Account are different. Depending on the banks and their Policy or Terms and Conditions, some Checking Accounts may enjoy higher interest and vice versa.
But it seems that the interest rates of Savings Account is usually higher than that of Checking Accounts in most country. reason because money is not expected to stay in a Checking Account(Current Account) for a long time.
5. Use Of Check and Cash Book
Most Checking Accounts(Current Accounts) make use of the Check Book. This makes it possible for them to issue payment and can be cashed out by someone else. Even a third party can also cash out money from Checking Account.
Savings Account uses the cash book. It is not possible for someone else to cash out money from Savings Account. The Savings Account Holder must be there physically to make withdrawal.
Where To Open Checking Or Savings Account
There are various banks across the world to open your Checking or Savings Account. In the United State we have the Chase Checking Account, Chase Savings Account, Bank of America Checking Account,Bank of America Savings Account, Wells Fargo Checking Account, Wells Fargo Savings Account etc.
In Nigeria we have the UBA Current And Savings Account, Access Bank plc Current And Savings Account, FirstBank of Nigeria Current And Savings Account, GTBank Current And Savings Account, Zenith Bank Current And Savings Account etc.
For other countries please visit a bank nearest to you and ask questions about these types of Accounts.
Checking and Savings Account might be just another type of Bank Account but they sure have something to offer to its holders. Please share our post on Facebook and Twitter using the share button below.