What's the difference between a checking account and a savings account?

A savings account is another type of deposit account, but designed to set aside money and grow your savings over time. "These accounts are often used for achieving longer-term financial goals, emergency funds or major purchases, like a house or car down payment," Meade says. They also tend to offer higher interest rates than checking accounts.

Should you use a checking account or a savings account?

Checking accounts are better for regular transactions such as purchases, bill payments and ATM withdrawals. They typically earn less interest — or none. Savings accounts are better for storing money. Your funds typically earn more interest. You might have a monthly limit on how often you can withdraw money without paying a fee.

Why should you choose a savings account?

There’s one standout reason to choose a savings account: earning interest. If your goal is to build your savings, savings accounts are often far better places to keep your money than checking. A savings account is the ideal place for money you don’t need to spend right now but can’t afford to lose.