One of the most effective ways to think about savings and checking accounts is to consider your short- and long-term goals. Do you spend a certain amount daily? Are you trying to save money for a substantial investment in the future? It’s imperative to understand the purpose of each account, its functions, and what lifestyle it suits. Below is a guide detailing both accounts.

Savings Accounts

Limited Withdrawals

The premise behind a savings account is to increase funds. You’re typically limited to only six withdrawals each financial statement cycle to discourage overuse, which is why the account doesn’t come with a debit card or checkbook. The premise behind a savings account is to increase funds over the long term.

Smaller Opening Minimums & Fees

You typically won’t be required to deposit a large amount of cash to open a savings account. At most credit unions, you can start with as little as $5. The savings account may require a minimum amount to avoid a balance fee. However, this type of account generally doesn’t include fees.

Checking Accounts

Unlimited Usage

A checking account is designed to accommodate your daily spending habits. It comes with a debit card so you can make cash withdrawals, a checkbook, and in most cases, bill payment and online banking features. There is generally no restriction on the number of transactions you can make in a single statement cycle.

Limited or No Interest Rates

Most checking accounts don’t provide an interest rate. Your funds grow solely on what you deposit in the account. Credit unions typically issue periodic dividends to their members. While there are some exceptions, some checking accounts may require larger amounts to open. You might also have to maintain a larger balance to avoid the minimum balance fees.

It’s essential to have both a savings and checking account to handle your daily and long-term financial needs. Hawaii County Employees Federal Credit Union in Hilo makes it easy and convenient with its variety of account options. The cooperative is also a part of the CO-OP Shared Branching Network™ so that members can use other participating credit unions for their checking and savings transactions. To learn more, call (808) 935-2969 and visit the website for details on their services.