cashier asks checking or savings

What is the difference between Checking and Saving Account?

When you use your LYNX card to make a payment, you’ll usually be asked, “Savings or Checking?” What’s the difference between these two accounts? Is there any advantage to having one or the other, or perhaps both?

Checking

Right now, your checking account is most likely your everyday ‘go to’ bank account for money. This is the account that you would typically use for day-to-day expenses like food, petrol, and entertainment. See https://www.nerdwallet.com/ca/banking/what-is-a-chequing-account for additional details. Simply put, this account will handle the majority of your transactions.

Savings

Your savings account, on the other hand, should be utilized to save money for the long run. This isn’t money you’d spend on a daily basis. This account serves as a safe haven for your money in the case of an emergency or if you wish to build up your savings for a specific financial goal. Savings accounts generally provide a greater interest rate on money stored in them than checking accounts. Some savings accounts also limit the number of withdrawals you may make, whereas a checking account allows you to do so. Visit https://www.investopedia.com/terms/s/savingsaccount.asp for additional information about savings accounts.

Despite the fact that they serve fundamentally distinct purposes, combining them may provide you an advantage over having one or the other. Having a checking and savings account can aid in the development of good money management practices. You may set up automatic transfers so that a part of your checking account deposits are automatically moved to your savings account. This allows you to distinguish between the money you intend to spend and the money you aim to save.

You will be able to structure your savings strategy depending on your projected monthly expenses if you use both accounts to your advantage. You have the option of spending the money you want and saving the money you require.

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