Many banks will offer new customers these two types of accounts together. They can be linked to make it easier to move the money between them and to protect your savings from being spent.
Checking Account
Checking accounts are designed for everyday use; the banks will provide many different ways to access the money held in this type of account using a debit/credit card, cheques or via online banking. It is not a line-of-credit or loan, the money in this account is what the customer has deposited.
Savings Account
Savings accounts are meant to do just that, to save or accumulate more money. Accessing and removing the funds held in this type of account is often limited to one or only a few methods, which is supposed to make it harder to withdraw the money and thus spend your savings! Again it is not a line-of-credit nor a loan; it is the customers own money.
Interest
Another significant difference between these types of accounts is the interest rate offered by the bank. Checking accounts frequently have very little, if any interest at all, provided on the balance of the account.
A Savings account, however, will usually have a higher interest rate offered to help grow the money. (Interest is the money earned from what is being held in the account, it is a set percentage which varies between different financial institutions or banks.)
So, if you are trying to save money for a future purchase, then a Savings account is the better place to guard your hard earned money. However, if all you need is an easy way to deposit, withdraw cash and pay for things, then a Checking account is for you!
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