It's important to save your money and banks are able to help you do exactly that. For proof of this, all you have to do is look at the various savings & checking options available to you. While they may seem similar in the sense that money can be deposited and withdrawn from them, there are numerous differences that should be covered as well. Here are just a few that the likes of Robert Jain will be able to share.
Before anything else, you may want to know the ways in which checking and savings accounts are similar. First, they are used primarily to hold money, not to mention make it easily accessible. Second, depending on the bank that you do business with, they can pay interest. In other words, the longer your money remains in the account, the more interest you slowly accumulate. Similarities like these should be covered by Bob Jain and other names in finance, and understandably so.
When discussing checking accounts, their general use should be discussed at the onset. These are used far more often than savings accounts, with customers regularly accessing them each day or every few days. They are also different from savings accounts in the sense that they typically don't have withdrawal restrictions. What this means is that you take as much money out as you'd like, as many times as you please, depending on your card's limit.
Savings accounts, on the other hand, are meant to be used with long-term mindsets in place. For those that don't know, the money that's brought into this account is meant to be used for larger purchases down the road. These run the gamut from new cars to housing, so it's not like bank customers are encouraged to take out money whenever they please. This is especially true when you consider that many savings accounts pay interest, which makes it all the more worthwhile to leave the money alone.
Now that you have a general understanding of both accounts, you may wonder which one you should open. It's recommended that you have both, mainly due to the fact that they serve unique purposes. While a checking account can be used on a regular basis, for example, it may not pay the interest that you're looking for. This is just one of the areas where a savings account can shine. In simple terms, one account shouldn't be ignored in favor of the other.
Before anything else, you may want to know the ways in which checking and savings accounts are similar. First, they are used primarily to hold money, not to mention make it easily accessible. Second, depending on the bank that you do business with, they can pay interest. In other words, the longer your money remains in the account, the more interest you slowly accumulate. Similarities like these should be covered by Bob Jain and other names in finance, and understandably so.
When discussing checking accounts, their general use should be discussed at the onset. These are used far more often than savings accounts, with customers regularly accessing them each day or every few days. They are also different from savings accounts in the sense that they typically don't have withdrawal restrictions. What this means is that you take as much money out as you'd like, as many times as you please, depending on your card's limit.
Savings accounts, on the other hand, are meant to be used with long-term mindsets in place. For those that don't know, the money that's brought into this account is meant to be used for larger purchases down the road. These run the gamut from new cars to housing, so it's not like bank customers are encouraged to take out money whenever they please. This is especially true when you consider that many savings accounts pay interest, which makes it all the more worthwhile to leave the money alone.
Now that you have a general understanding of both accounts, you may wonder which one you should open. It's recommended that you have both, mainly due to the fact that they serve unique purposes. While a checking account can be used on a regular basis, for example, it may not pay the interest that you're looking for. This is just one of the areas where a savings account can shine. In simple terms, one account shouldn't be ignored in favor of the other.
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Kindly consult Bobby Jain for more information regarding finance in general.. Free reprint available from: How Checking And Savings Accounts Differ, By Robert Jain.
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