Savings accounts aren’t just for the famous or wealthy, everyone should have one. When you become a member of Michigan First Credit Union, we create a savings account for you. So, you’re already one step ahead of the competition. But, what’s the difference between a checking and savings account?
A checking account is considered transactional. This is where your everyday spending money and money for monthly bills belong. Checking accounts unfortunately don’t earn interest. However, you can access your money easily and as often as you want with a debit card, online bill payment, or even a check.
This is a safe place for you to store money securely while it earns interest. That’s right, this account helps your money make money! The money in your savings account can be lent out by the financial institution and you get paid interest as a small thank you.
You can still access your money in a savings account but you may get a fee if you go over the monthly transaction limit. Keeping your extra money in a savings account will encourage you to reduce spending by putting some distance between you and your money.
When trying to decide where to put additional funds, ask yourself…
- How often will I need to access this money?
- How do I want to access this money?
- Is making interest on this money important to me?
Note – Study the fee schedule of your financial institution. Not all checking or all savings accounts are the same! Fees are not standard across all accounts or all financial institutions.