When you’re starting to get your finances in order, it’s normal to struggle with which accounts you should open, how to save, and how to align everything in a way that works for you.
One of the largest questions people have is whether they should open a savings or a checking account and which works better. This is everything you should know about these accounts and why you’d open either.
What’s the Purpose of a Checking Account?
A checking account can be incredibly useful. Not only does it give you a safe and easy way to connect your finances to your bank, but it also ensures your money is protected from anyone who could try to access it.
If you just had your money in cash, it could be trouble. A digital checking account is even better because it allows you to track your spending and the payments you receive in a far clearer format. This is awesome for anyone who’s trying to get better control over their finances.
What’s the Point of a Savings Account?
A savings account is important because it allows you to set aside money in a way that can only be spent through direct routing numbers and transfers, unlike a checking account that can be spent by card or check. This allows you to save more money and set it aside in a way that takes extra steps to remove it.
This also makes it easier for anyone who needs specific metrics in order to save the money they’re trying to set aside since it gives you a clear view of how much you have set aside. It also allows you to keep a limited amount of money in your checking account, which will save you from accidentally spending too much.
Which Account is Better to Open?
For daily use, it’s better to have a checking account. Not only does this give you a space to direct deposit your paychecks, but it also ensures that you can use a card to spend your money when you need it.
You can have one of each account if you need to save! Most people have at least one savings and one checking account. There are some banks and financial institutions that enable you to have both through them, but whatever type of institution you go through, it’s a good idea to get one of each.
Is it Hard to Open A New Account?
Although many fear opening a new account: it’s not as scary as it seems! When you open a new account, make sure it’s with a trusted financial institution. They’ll ask for some personal information from you to ensure that you are who you say you are, and they’ll use that to protect you in the future as well.
From here, you’ll connect any other financial institutions you have or your Paypal and Venmo, and you can ask for information on how to connect your job for direct deposit.
Checking and Savings Accounts are Important!
Whether you’re starting a new job or starting to learn how to save money: it’s important to have the right account that suits your needs. Consider opening a checking or savings account that will keep your funds secure.
