Checking vs. Savings Accounts: Which Do You Really Need?


Checking and savings accounts are essential types of banking accounts, but maybe you're wondering, do I really need both? And if I only want to have one account, which is more important to have?

In general, you'll find that a checking account is more essential because it’s how most people receive their paychecks as well as pay their bills. But, a savings account is a great way to shore up money so that you have it when you need to make a big purchase or expenditure.

Read on for a full comparison of checking vs. savings accounts so you can make sure you have everything you need to succeed!


Most checking accounts let you make many different types of transactions every day and usually, there's no charge.

Here's what you need to know about checking accounts:

  • Use a checking account to receive your direct deposit paycheck or deposit your physical check or cash wages.
  • Pay your bills from your checking account using an electronic transfer (ACH), Bill Pay, or by check. 
  • Make any number of withdrawals at a branch or from an ATM machine.
  • Link your account to a digital wallet, digital payment service, or mobile payment app to make quick bill payments and transfers to friends and family. 
  • There's usually no fee to do any of these transactions provided you have sufficient funds and you use an in-network ATM.
  • There may be a monthly fee but it's often possible to waive it by maintaining the minimum monthly balance or signing up for certain services. 
  • Some checking accounts offer an annual percentage yield (APY) on your balance but you'll usually get a better rate on a savings account.


A savings account is designed to encourage you to deposit your money and leave it there for as long as possible. There are various types of accounts you can open based on how much you plan to save and for how long. 

Here's what you need to know about savings accounts:

  • Some savings accounts have a minimum opening balance. For example, $5 to open a basic savings account (or $2,000 to open a Share Certificate Account).
  • Specific accounts like Summer Time, Christmas Club, and Rainy Day Fund generally don't need an opening deposit, but they may require funding through a direct deposit or payroll deduction.
  • You can set up direct deposits or payroll deductions, or automatic transfers from your checking account to help you save. 
  • Regulations limit the number of electronic withdrawals on a savings account, and specialty accounts may have other limits as well, so be sure to know the limitations for the account type you open. 
  • Using savings goal tools within online banking or mobile banking can help you stay on track to meet your savings goals. 
  • You’ll usually earn a higher annual percentage yield (APY) on savings accounts than on checking accounts.
  • The higher your balance, and the longer you leave your funds, the more you'll earn!


Checking accounts come with a variety of features to suit different needs and wants. For example, a student may want different services than an executive employee who’s managing significant assets. 

Similarly, a young professional will have different savings goals compared to an older person who is approaching retirement. So it's up to you to decide which checking and savings account features you need!

Everyday Digital Banking: Checking Account

Have you been into a store lately and discovered they don't accept cash? While not strictly legal, this is becoming more common with the rise of digital wallets, Online Banking and Mobile Banking

Combined with your checking account, these electronic services are your key to managing a busy twenty-first-century life: 

  • Automatic Payment and Bill Pay: Enter your payee’s details once, then choose recurring or one-time payments.
  • Zelle: Find your contacts by phone or email and quickly send them money.
  • Mobile check deposit: Take a photo of your check in the app and you can receive the funds right away!
  • PayPal, Google Pay, Apple Pay, Samsung Pay, Amazon Pay, or your preferred provider let you shop quickly and securely both online and in-store. 
  • Contactless debit cards: Just tap and pay without touching the terminal.
  • Alerts: Get notified when certain transactions occur so you can detect fraud early.

Note that you can also use online and mobile banking to transfer funds between your Savings Account and Checking Account!

Save Money and Earn Interest: Savings Account

We all need a sense of financial security. For a student, that may be the luxury of $500 in a savings account to use when needed. Meanwhile, executives might be investing their assets in a diverse portfolio—but they need healthy cash reserves, too.

Choose a savings account if you want to create a cushion for your future:

  • Regular Savings: Open an account with as little as $5, get a great APY, and access your account 24/7 via online and mobile banking. 
  • Custom Savings Accounts: You can open separate savings accounts for anything from tax payments, to vacations, or child care expenses with no minimum balance.
  • ​​Arrange for funds to be deposited automatically through Payroll Deduction or Direct Deposit.

Fraud Protection and Insurance: Checking Account

Depending on which checking account you choose, you can sleep easy at night with one or more of these enhanced security features:

  • ID protection
  • Credit report monitoring
  • Cell phone insurance
  • Overdraft protection 


Now that you're up to speed on checking vs. savings accounts, you might be thinking about adding another account to what you've already got—or possibly taking your business elsewhere. 

Keep in mind that not all financial institutions are created equal! Credit unions, like Foothill Credit Union, are not-for-profit organizations, which means we pass our revenue back to members through fewer fees, lower rates on loans, and higher yields on savings. 

We also offer friendly local service and useful financial resources like the one below. Click the link for smart ideas about how to use Online Banking with your preferred checking and savings account.

Benefits of Online Banking for Busy Professionals