Checking and savings smarts: Make your accounts work harder for you

April 13, 2022

Learn which type of account to use for what purpose when trying to achieve your financial goals.

 

Four months. 40 years. No matter how long you’ve been managing your own money, you can always learn new ways to practice smart spending and saving. 

 

What is a checking account?

Your checking account is your primary tool to use to pay day-to-day expenses. It lets you accept money — and then spend that money to meet your everyday expense needs.

Your checking account safely holds the funds you need. When you pay for groceries, gas, and monthly bills, it’s common to use money from your checking account.

 

What is a savings account?

If a checking account can be viewed as a primary tool to use to pay day-to-day expenses, a savings account can be thought of as a "piggy bank."

The primary purpose of a savings account is to protect your money for future use. By design, it limits how frequently you can transfer funds in and out. So you’re not tempted to use it for day-to-day spending.

A savings account is a financial tool with a couple of unique features. The first is that limitation on transfers. The second? Interest. A savings account offers you an interest rate on the money in your account to help your savings grow. 

 

What is interest, and how can it help me save over time?

Some savings accounts offer a small financial return in exchange for keeping your money in that account. This return (a.k.a., interest) gets calculated as a percentage of the balance you maintain in the account.

The percentage varies depending on the type of account you hold. Other “interest-bearing” financial tools, such as certificates of deposit (CDs,) offer potentially higher returns. But these accounts also charge fees for early withdrawal.

So a savings account gives you the best of both worlds: You get a small return on your investment. You also have the flexibility to make withdrawals or transfers.

 

What is the best savings account for me?

Some savings accounts will suit your needs better than others. Asking these questions can help you find a good fit. 

  • What is the yearly interest rate for this account?
  • Will I pay a fee to open this account?
  • Does this account automatically charge a monthly maintenance fee?
  • Are there certain activities I can perform or minimum balances to meet in order to waive a monthly maintenance fee?
  • Do I need to keep a minimum balance in the account to avoid fees?
  • What other fees apply to this account? (Examples: transactions outside your financial institution, foreign transactions, wire transfers) 
  • Can I withdraw money from this account at an ATM?
  • Can I make payments from this account?
  • Can I make recurring automatic transfers from my checking account into this savings account?


What is the best checking account for me?

You’ll want to be as choosy with your checking account as you are with your savings account. In general, make sure you get a clear picture of the accounts that meet your financial needs. Pay special attention to the account’s overdraft policy. These questions can help you decide which checking account makes the most sense for you.

  • Does this account have a monthly maintenance fee? What steps can I take to avoid this fee as well?
  • Do I need to keep a minimum balance in the account to avoid fees?
  • What is the overdraft policy on this account?
    • Does this account offer overdraft protection? How does that protection work?
    • How much does a single overdraft cost?
    • How many fees per day could I potentially rack up (if there’s more than one overdraft)? What’s the maximum cost I might see per day as a result?
  • Does this account charge me if I use an out-of-network ATM?
  • What other fees apply to this account? (Examples: foreign transactions, wire transfers.)

 

How can I make my checking and savings accounts work together for my benefit?

Checking and savings accounts offer more than secure storage for your hard-earned income. Used together, they can help you develop a solid financial health plan. 

You may want to consider setting up an automated savings option to help you prepare for your future. For example, say you deposit $1,000 from your paycheck into your checking account. You can earmark $200 of that so it gets automatically moved into your savings account. You control the amount, the frequency, the day of the week for the transfer. And you can change these settings as your life circumstances change.

Auto transfers are a great tool for holding yourself accountable to a higher level of financial preparedness.

 

If you need help determining with account is right for you, learn more about our checking or savings accounts today.

Related content

How and when to ask for a raise

Your guide to starting a job: Resources to help along the way

3 financial tools to help automate your finances

What you need to know about renting

What financial advice would you give your younger self?

Travel for less: Smart (not cheap) ways to spend less on your next trip

Tips to raise financially healthy kids at every age

Tips and resources to help in the aftermath of a natural disaster

The mobile app to download before summer vacation

Webinar: Mobile banking tips for smarter and safer online banking

7 financial questions to consider when changing jobs

Dear Money Mentor: How do I pick a savings or checking account?

5 tips for parents opening a bank account for kids

Things to know about the Servicemembers Civil Relief Act

Financial Wellness Assessment

5 things to deinfluence in your finances

Webinar: Mindset Matters: How to practice mindful spending

3 awkward situations Zelle can help avoid

What’s in your emergency fund?

Adulting 101: How to make a budget plan

Don’t underestimate the importance of balancing your checking account

Overcoming high interest rates: Getting your homeownership goals back on track

Money Moments: 3 tips for planning an extended leave of absence

Should you buy now, pay later?

Bank from home with these digital features

How to increase your savings

How to choose the right rewards credit card for you

Money Moments: How to manage your finances after a divorce

Helpful tips for safe and smart charitable giving

Real world advice: How parents are teaching their kids about money

The banking app you need as a new parent

A passion for fashion: How this student works the gig economy

Money Moments: 8 dos and don’ts for saving money in your 30s

3 ways to keep costs down at the grocery store (and make meal planning fun)

6 pandemic money habits to keep for the long term

Stay committed to your goals by creating positive habits

5 things to consider when deciding to take an unplanned trip

How having savings gives you peace of mind

What to do when you lose your job

Dear Money Mentor: How do I set and track financial goals?

9 simple ways to save

Checking and savings smarts: Make your accounts work harder for you

Allowance basics for parents and kids

Steer clear of overdrafts to your checking account

A who’s who at your local bank

Finding a side gig to fund your goals

Working with an accountability partner can help you reach your goals

Is it cheaper to build or buy a house

30-day adulting challenge: Financial wellness tasks to complete in a month

First-timer’s guide to savings account alternatives

Friction: How it can help achieve money goals

How to Adult: 7 tax terms and concepts you should know

First-time homebuyer’s guide to getting a mortgage

3 tips for saving money easily

An eco friendly debit card with roots in Haiti

How to use your unexpected windfall to reach financial goals

Money management guide to financial independence

5 myths about emergency funds

Earning in the gig economy: Gladys shares her story

Booming in the gig economy: A new chapter leveraging 45 years of experience

By the numbers: The gig economy

Certificates of deposit: How they work to grow your money

What military service taught me about money management

Should I itemize my taxes?

Tips for working in the gig economy

Common unexpected expenses and three ways to pay for them

How to best handle unexpected expenses

Is it time to get a shared bank account with your partner?

Financial gifts can be a valuable – and fun – choice for the holidays

Webinar: Smart habits and behaviors to achieve financial wellness

Managing money as a military spouse during deployment

Practical money tips we've learned from our dads

Myths vs. facts about savings account interest rates

Make holiday gift giving easier in a digital world

5 tips for creating (and sticking to) a holiday budget

What I learned from my mom about money

How compound interest works

Your 4-step guide to financial planning

Stay on budget — and on the go — with a mobile banking app

Financial checklist: Preparing for military deployment

U.S. Bank asks: Transitioning out of college life? What’s next?

How to financially prepare for a military PCS

Military finance: How to create a family budget after military service

Here’s how to create a budget for yourself

Understanding guardianship and power of attorney in banking

How to decide when to shop local and when to shop online

How I kicked my online shopping habit and got my spending under control

Personal loans first-timer's guide: 7 questions to ask

Growing your savings by going on a ‘money hunt’

Multiple accounts can make it easier to follow a monthly budget

Managing your finances in the military

You can take these 18 budgeting tips straight to the bank

Are savings bonds still a thing?

How I did it: Learned to budget as a single mom

What’s your financial IQ? Game-night edition

How to stop living paycheck to paycheck post-pay increase

Which is better: Combining bank accounts before marriage — or after?

Does your savings plan match your lifestyle?

Do you and your fiancé have compatible financial goals?

Overdrafts happen: Steps to get you back on track

How to cut mindless spending: real tips from real people

Webinar: 5 myths about emergency funds

Webinar: Common budget mistakes (and how to avoid them)

5 reasons why couples may have separate bank accounts

7 steps: How couples and single parents can prepare for child care costs

How can I help my student manage money?

How to manage money in the military: A veteran weighs in

How to save for a wedding

How to save money while helping the environment

It's possible: 7 tips for breaking the spending cycle

Money Moments: 3 smart financial strategies when caring for aging parents

Personal finance for teens can empower your child

Save time and money with automatic bill pay

Tips to overcome three common savings hurdles

Webinar: Uncover the cost: Wedding

Webinar: Uncover the cost: International trip

Building a financial legacy for your family and community

U.S. Bank asks: Do you know what an overdraft is?

U.S. Bank asks: Do you know your finances?

Essential financial resources and protections for military families

5 tips to use your credit card wisely and steer clear of debt

P2P payments make it easier to split the tab

5 ways to spring clean your finances and save money year-round

How to Adult: 5 ways to track your spending

Webinar: Uncover the cost: Starting a family

How to plan and save for adoption and in vitro fertility treatment costs

What you need to know as the executor of an estate

When your spouse has passed away: A three-month financial checklist

What documents do you need after a loved one dies?

College budgeting: When to save and splurge

6 questions students should ask about checking accounts

Four ways to make a strong resume for your first real job

What applying for store credit card on impulse could mean

CancelSave & Close Planning self-care moments that matter (and how to finance them)

Does your side business need a separate bank account?

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.