How do most people save money? While specific strategies will differ, the vast majority of people put their trust into banks. This is where they open checking and savings account, both of which are similar in certain ways and different in others. When it comes to the latter, there is much to cover. With the financial help of Robert Jain, here are the ways that the aforementioned accounts differ and why it may be in your best interest to open them.
Before discussing the differences between savings & checking accounts, it may be prudent to discuss the similarities. The most prevalent, as names such as Bob Jain will tell you, is that they are used to hold money. Furthermore, they can be accessed at any time with the use of one's bank or debit card. Withdrawals and deposits can be made as customers deem necessary. These are just a few similarities that these accounts share.
Checking accounts are different from savings accounts, however, such as in their use. Anyone that owns the former account will tell you that if it isn't accessed daily, it is used once every few days. What this means is that it gains more regular use than savings. A checking account can be easily accessed anywhere without the risk of penalty, too. These are just a few stark differences that will become immediately evident.
While checking accounts are used for general purposes, savings accounts are associated with the future. Any money that's brought into this type of account is meant to be saved, hence the name, usually for bigger purposes in the future. For example, if you desire to make a down payment on a new house, it's safe to assume that the money will come from your savings. If you end up withdrawing from this account earlier, you may not gain as much interest as you would have otherwise.
Now that you have a general understanding of both accounts, you may wonder which one you should open. It's recommended that you have both, mainly due to the fact that they serve unique purposes. While a checking account can be used on a regular basis, for example, it may not pay the interest that you're looking for. This is just one of the areas where a savings account can shine. In simple terms, one account shouldn't be ignored in favor of the other.
Before discussing the differences between savings & checking accounts, it may be prudent to discuss the similarities. The most prevalent, as names such as Bob Jain will tell you, is that they are used to hold money. Furthermore, they can be accessed at any time with the use of one's bank or debit card. Withdrawals and deposits can be made as customers deem necessary. These are just a few similarities that these accounts share.
Checking accounts are different from savings accounts, however, such as in their use. Anyone that owns the former account will tell you that if it isn't accessed daily, it is used once every few days. What this means is that it gains more regular use than savings. A checking account can be easily accessed anywhere without the risk of penalty, too. These are just a few stark differences that will become immediately evident.
While checking accounts are used for general purposes, savings accounts are associated with the future. Any money that's brought into this type of account is meant to be saved, hence the name, usually for bigger purposes in the future. For example, if you desire to make a down payment on a new house, it's safe to assume that the money will come from your savings. If you end up withdrawing from this account earlier, you may not gain as much interest as you would have otherwise.
Now that you have a general understanding of both accounts, you may wonder which one you should open. It's recommended that you have both, mainly due to the fact that they serve unique purposes. While a checking account can be used on a regular basis, for example, it may not pay the interest that you're looking for. This is just one of the areas where a savings account can shine. In simple terms, one account shouldn't be ignored in favor of the other.
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