Short-Term Savings Goal? A Checking Account Is Often Better Than A Savings Account
Posted on: 10 June 2020
When people think about saving money, they tend to think about opening a savings account. Sure, if you are saving a lot of money long-term, such as for a down payment for a home, then opening a savings account is helpful. However, if your savings goals are smaller and more short-term, a checking account is a better option.
No Fees
There are plenty of financial institutions that offer free checking accounts, whereas the fee structure with savings accounts is often tricky. With a savings account, you open the account with an agreement to keep a certain amount of money in the account at all times.
Depending on the institution, this amount could be a few hundred or thousands of dollars. If you only need to save for something short-term and it is not a large amount, you will end up paying money each month in fees if your balance is too low. As long as you set up an automatic deposit, such as a portion of your paycheck, deposited into the checking account each month, you can likely avoid any fees with the checking account.
Easier Access
While some savings accounts provide debit cards, a large number of these accounts do not offer this feature. As a result, if your savings account and primary checking account are not at the same institution, you might only be able to access the funds in savings during normal business hours, which might be a problem in the event of an emergency.
Checking accounts come with debit cards that you do not have to use but that you have access to so that in the event of an emergency, you do not have to wait to get access to your own money.
Rewards Program
Many checking accounts also come with automatic enrollment into a rewards program. With these programs, whenever you use the debit card linked to the account, you can earn points that translate into money or you can receive a discount at certain businesses.
Consider a checking account opened for savings vacation funds, for instance. If the rewards program offered discounts on hotels and restaurants, you could use the card linked to the account to save money and have more to spend on excursions or shopping while you travel.
Remember, you can have as many accounts as you need to meet your financial needs. So, if you want to save, contact a financial institution about opening a checking account.
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