Having the right tools is essential for any task. When it comes to your finances, the first tools you need are bank accounts. There are two basic types of accounts, chequing, and savings. So what is the difference between a chequing and savings account, and do you need both?
A chequing account is a place for the money you use for day-to-day living expenses. It’s often where people have their paycheque deposited, and it’s designed to allow you to make frequent withdrawals, transfers, and payments. To do so, it usually includes a generous allowance of transactions for a reasonable monthly fee, alongside a debit card. The catch is that money deposited in a chequing account usually doesn’t earn interest.
A savings account is used to store money for a longer-term. It’s often used to set money aside as an emergency fund or short-term goals, like a new car, vacation, or home renovations. The most significant benefit of a savings account is that your money earns interest. Most savings account have limited free monthly transactions designed to encourage you to keep your deposits in the account.
A savings account is usually only accessible via online banking or in a branch. Some savings accounts are also available at ATM’s, but you may incur a fee*.
Do I need both?
Chequing and savings accounts are great tools for specific jobs – together, they offer ways to make it easier for you to manage your money. You can set up automatic transfers that allow you to move a little money from your chequing to your savings account automatically, or use Alterna’s “Save the Change” feature which rounds all debit card purchases up to the nearest dollar and automatically transfers the difference to your savings account. It’s a great way to maximize your savings.
Click here to open a saving or chequing account today!
*Alterna’s daily savings accounts are accessible at ATMs. These savings accounts allow 2 withdrawals per month for free before incurring fees.