Interest Checking vs. Savings Accounts
10/7/24
These days, interest-paying checking accounts are increasingly common. But, why do we still use savings accounts, or in most cases both a checking AND a savings account?
Keep reading to learn what sets interest checking accounts apart from savings accounts We’ll consider how each account works, what it aims to achieve, and why you would want to have either one, or both, in your financial portfolio.
We’ll also provide tips for handling interest-bearing accounts and discuss how Texans Credit Union can help you get more out of both your savings and your cash on hand.
ATTRACTING INTEREST: INTEREST CHECKING & SAVINGS ACCOUNTS
At one time if you wanted to earn any interest on your money, it needed to be tucked away in a savings account, while the bulk of your income passed through your checking account without earning you anything at all.
These days, innovative credit unions like Texans Credit Union offer good rates on deposits in your checking account. So, do you still need to have both types of account, or is a checking or savings account enough on its own? Let’s find out.
INTEREST-EARNING CHECKING
Interest-earning checking accounts combine the convenience of traditional checking with the added benefit of earning dividends on your balance. The major advantages of Texas Credit Union’s My Texans Interest Checking account include:
- Convenience and flexibility: Spend your money on your terms. Access cash at more than 80,000 surcharge-free ATMs. Make paying simple with your Texans Visa ® debit card, or pay with your phone using a digital wallet.
- No limits checking: Get paid a day earlier with direct deposit. Send and receive money quickly and securely with Zelle ® . Keep tabs on it all from our easy-to-use mobile app.
- Earn dividends: Make your money work harder. Earn dividends on balances of $2,500 or more while maintaining unlimited access to your funds.
- No monthly fee: Enjoy no monthly fee when you maintain a daily balance of $2,500 or more. A $10 monthly fee applies if minimum daily balance is not met.
- Peace of mind: Sign up for overdraft protection. Use our mobile app to turn your card off or on instantly.
- Get free perks: As an account holder, you get free check cashing, free mobile and digital banking services, free personal finance tools, and free access to your credit score via Credit Connection.
All in all, interest-bearing checking accounts are a good choice if you want easy access to your money while still earning interest. They work best for those who like to maintain higher balances in their checking account or want to keep all their funds in one place.
SAVINGS ACCOUNTS
Savings accounts help you grow your money over time by paying dividends on deposits, making them ideal for building on funds you don't need for everyday expenses. Here are some of the benefits of our Texans Savings Account :
- Unlimited withdrawals: Unlike many banks and credit unions, Texans Credit Union offers unlimited monthly deposits, withdrawals, or transfers from your savings account.
- Availability: Access your money either in-branch or via our network of more than 80,000 surcharge-free ATMs.
- Federal deposit insurance: Like all Texans Credit Union deposit accounts, money in your savings account is insured up to $250,000 per account by the federal government through the NCUA .
- Perks: Enjoy many of the same benefits as our checking account holders, including free digital and mobile banking services, free check cashing, and free access to our personal finance software.
A savings account is a great place to start your financial journey. That’s why we open a savings account for every member who joins Texans Credit Union!
WHEN WOULD YOU USE AN INTEREST CHECKING OR SAVINGS ACCOUNT ALONE?
Is there any advantage to using either an interest checking or savings account on its own? Choosing to use an interest-bearing checking account or savings account alone may make sense depending on your financial situation and goals.
An interest-bearing checking account could be a better choice if you:
- Usually have more than the minimum balance to earn interest in your account.
- You don’t need to save money separately or prefer to keep all your cash in one place.
- You want easy access to all of your money all of the time.
On the other hand, a savings account may be best if you:
- Use mainly cash or have very simple banking needs.
- Don’t want to worry about keeping the minimum balance to earn interest in your checking account.
- Simply require a place to store and grow emergency funds or savings.
- Still want instant access to your money.
In reality, most people find it practical to have both a checking and one or more savings accounts, even if they are at different banks, allowing them to save separate amounts for different things. Earning dividends on cash in your checking account is a great way to make your working cash work harder.
CHECKING, SAVINGS, OR BOTH: WHAT’S RIGHT FOR YOU?
Both checking and savings accounts are simple and relatively cheap to maintain, especially at local credit unions like Texans Credit Union. They’re also designed to do different things. If you find yourself having to choose between them, here are some things to consider:
- What are your financial goals? If you're focused on long-term savings or building an emergency fund, a savings account might be your best choice. If you want easy access to your funds while earning interest, an interest-bearing checking account could be ideal.
- How often do you need to access your money? If you need frequent access to your funds for everyday expenses, a checking account's flexibility is crucial. If you want to keep savings separate from everyday expenses, then a savings account will serve you better.
- Can you meet minimum balance requirements? Interest-bearing checking accounts generally require you to maintain a minimum balance to avoid fees and earn interest. If this fits your lifestyle, it's a good way to keep earning while using your account. If not, a non-interest checking account or savings account with a lower minimum balance might be a better fit.
People generally need a checking account to receive and access their income. In addition, many credit unions, including Texans, require you to open a savings account when you become a member. For most people, running both a checking and a savings account just makes sense.
WHAT DO I NEED TO OPEN A SAVINGS ACCOUNT?
Ready to open a basic savings account? You’ll need:
- Proof of identity and residence
- Your social security number
- Your initial deposit. Texans Credit Union requires an initial deposit of just $5.
Many credit unions require you to prove you live or work within a particular service area. At Texans Credit Union we keep it simple. If you live in the state of Texas, you’re eligible to join.
WHAT DO I NEED TO OPEN A CHECKING ACCOUNT?
Requirements to open a checking account are similar, although your proof of identity and address will not be required if you already hold a savings account.
You will usually have to pay an initial deposit to open your account. At Texans Credit Union, your initial deposit can be as low as $5! To earn interest, you may have to maintain a higher minimum balance in your account. For My Texans Interest Checking, you can earn dividends on amounts over $2,500.
TEXANS CREDIT UNION: COME HOME TO GREAT INTEREST
Life is busy here in Texas. That’s where Texans Credit Union comes in.
We provide a full range of financial services to our members, so you can get stuff done quickly, conveniently, and affordably. It’s why we open an easy-to-access savings account to every member, and why we’ve launched a generous interest checking account to help you get more out of your hard-earned cash.
You’ll find a comprehensive suite of debit card, digital banking, and checking services designed to make your life easier. And, to help you keep more money on the table, at Texans Credit Union we offer higher interest on checking deposits than we do on our savings account!
We welcome you to learn whether a Texans Credit Union savings or interest checking account is right for you. Our friendly staff is always available to help. To get started click below!
LEARN MORE ABOUT CHECKING ACCOUNTS
LEARN MORE ABOUT SAVINGS ACCOUNTS