Both checking and savings accounts allow individuals a safe, reliable place to store their money, as well as easy access to available funds. But there are some subtle differences between the two types of accounts offered by most banks and credit unions. Below, some of the more common differences are discussed in further detail.

What They Are

A checking account is designed for daily financial interactions that require quick, frequent access to one's money. Most checking accounts come with a supply of personal checks and a debit card for easy withdrawal of funds. A savings account, on the other hand, is for those looking to save money in a secure environment, either short-term or long-term. There is no financial risk associated with your average savings account.

Withdrawal Restrictions

Given the everyday usage of checking accounts, there is no limit to how often you draw on your funds. With savings accounts, the rules for withdrawal restrictions will vary depending on the bank, and the type of savings account you have. Generally, three to six withdrawals are permitted each month, but it's best to check the guidelines of the specific savings account you have before taking money out.

Minimum Balances

Minimum balance requirements differ from bank to bank. A minimum balance may or may not be required, depending on the type of account for which you've signed up. If you need to maintain a minimum balance, it's always best to do so to avoid penalties and potential overdraft charges.

Interest

Typically, money in a standard checking account won’t earn interest. Savings accounts, however, are different. Interest rates often accrue on any money placed in savings. It’s important to note, though, those rates can differ greatly between banks.

Since 1936, Hawaiian Tel Federal Credit Union has been providing premier banking services. Call (808) 832-8700 or visit their website to learn more about their checking and savings account options. You can also visit them on Facebook and Twitter to stay updated with relevant news and information.