Savings vs Checking Accounts
Have you ever been confused about the difference in a checking and savings account? Let’s talk about it.
Checking accounts
A checking account is a deposit account that you use for everyday spending. This includes things like groceries, gas and paying bills.
Your money is safe and insured by the NCUA up to $250,000. NCUA is the national credit union administration and is similar to the FDIC for a bank.
There are several ways you can access your funds:
· Shop with your debit card
· Withdraw cash at an ATM
· Visit a teller at the credit union to deposit or withdraw funds
· Cash back at the register when shopping
Anytime you use one of these options, the funds are taken directly from your checking account so you want to make sure you have the money in the account. If not, you will be charged a fee for each transaction that is over your balance.
You can also access your account through our online banking on your computer. There you can see your balances, pay bills or even transfer money from one account to another.
You can also use our mobile app on your phone or tablet. The app has many of the same features as online banking like seeing your balance and your transactions. You can transfer money from one account to another or you can use Zelle to send or receive money. Zelle is a peer-to-peer service and its meant to be a transfer between people you trust like family or friends.
Deposits can be just as easy.
· Remote deposit capture – allows you to deposit a check using your app. Her you take a picture of your check with your phone to complete the deposit.
· Direct deposit - your paycheck can be deposited directly into the account of your choosing. It can even be deposited into multiple accounts.
o Visit your HR department and tell them you would like to participate in direct deposit. You will need to have your account information to share with them. Some financial institutions offer the option to receive your check in your account two days early, First Pioneers is one! But its only if you are using direct deposit.
Ask questions before opening an account:
· What is the monthly maintenance fee for the account, if any? If so, there may be options to waive the fee.
· Is there a minimum account balance requirement for the account?
· What is the overdraft policy?
o What are the charges for overdrafts?
o Is there overdraft protection?
o What are the specific parameters?
· What is the availability of ATMs that can be used with your card?
o Where are ATMs that are fee free?
· What other fees are associated with the account?
Savings accounts
A savings account is kind of like having a really safe piggy bank! The account is secure and the funds are there for the future when you need them.
Like a checking account, a savings account is insured by the NCUA.
Savings accounts offer interest, so your money will grow as long as you leave it in the account.
When you have a savings and checking account, you can transfer money from one to the other. It being that easy can really help you save. Its also helps when the money is not in your checking account and easy to spend. The money in your savings can be used for any needs like for an emergency, a future goal like a house or car or even unexpected things like a job loss.
At First Pioneers, we offer the option of an ATM card that is attached to your savings account. It’s just for your savings and different than a debit card. This is for use at an ATM only and comes from your savings account.
There are a few different types of savings accounts:
· Standard savings (at a Credit Union this is called a share account)
· Money market
· Certificate of Deposit (CDs)
You can have multiple of any of these accounts.
Just like with a checking account, consider visiting the different types of accounts and determine what fits your needs the best.
Some questions to consider asking when choosing a savings account are:
· What is the interest rate earned on the account?
· Is there a minimum deposit required?
· Is there a minimum daily balance required to be maintained in the account?
· Are there any maintenance fees on the account? And if so, are there ways to waive the fee?
· How can you withdraw money from the account?
· Is there a limit for withdrawals or transfers out of the account?
As you can hopefully see, these accounts are different and have different uses. There are benefits to both, the biggest being, they are a safe place to store and access your money.
If you are looking for an account to keep your money to pay for everyday expenses, a checking account is a good choice.
If you want to grow your money and not use it daily, a savings account is a good choice.
It doesn’t have to be either/or, you can have both!
It also helps to have both accounts at the same financial institution.
The key is to understand the accounts and see what fits your needs best.
Bonus Tip!
Many credit unions are part of what’s called a shared branching network. This means you can do basic banking at a shared branch when you are away from your home credit union.
· Online - https://co-opcreditunions.org/locator/
· On the app - co-op shared branching app. It can be downloaded on Apple or Google store.
· Text 5-digit zip code to 91989
You can use the same to find an in network ATM.
If you need help understanding different account types or understanding a credit union or really any other financial questions, feel free to reach out to us at either branch and we are happy to help you find your answers and your fit.