Checking Account Vs Savings Accounts – The Pros And Cons

National nonprofit American Consumer Credit Counseling shares the benefits and drawbacks of checking and savings accounts

Boston, MA – July 25, 2017

Checking Account vs Savings AccountsChecking and savings accounts, often considered the most basic financial tools, are also incredibly beneficial to the average consumer in everyday life. Checking accounts help consumers pay bills and savings accounts are more suited to protect money for the future. While there are many advantages to using each type of account, consumers must stay informed about the disadvantages to maintain financial security.

“If consumers do their research they can maximize the benefits of both a checking and a savings account,” said Steve Trumble, President, and CEO of American Consumer Credit Counseling, based in Newton, MA. “Consumers need to be aware of the positives and negatives of both before opening a new account.”

According to U.S. News, more Americans have access to a checking or savings account, a sign that the improving economy is helping lift the nation’s poorest households. The number one reason why Americans say they do not have a checking or savings account is that they believe they do not have enough money to get an account. The FDIC said roughly 57 percent of all unbanked households cited lack of money as a reason not to have an account. With the increase in consumer interest in both checking and savings accounts, it is even more important to understand the benefits and drawbacks of each.

American Consumer Credit Counseling provides consumers with a list of pros and cons checking accounts and savings accounts:



  1. Access – the ability to link checking accounts through online banking for ease of fund transfer.
  2. Credit score – when managed responsibly, a checking account can help a consumer build a higher credit score.
  3. Direct deposit – many employees and employers find direct deposit, made available for checking accounts, useful and convenient.
  4. Online option – online checking accounts have quickly become a favorite and convenient way for account holders to manage their money. Account tools can be accessed through a phone or computer and make everyday banking easier.
  5. Insurance – the Federal Deposit Insurance Corporation, or FDIC, insures most checking accounts.


  1. Fees – many checking accounts come with additional costs such as maintenance fees, ATM withdrawal fees and transaction fees.
  2. Overdraft fees – overdraft fees, when the balance goes below zero, are determined by each individual bank, making them difficult to understand and often very expensive.
  3. Minimum balances – some banks require minimum balances enforced by a fee if the requirement is not met.
  4. ATM limitations – depending on the amount a consumer wishes to withdraw at a time, an ATM may not be a large enough option to suit their needs.



  1. Interest – account holders can save money while making a small amount of interest on their investment.
  2. Time – consumers can withdraw money at any time from a savings account, unlike other investment options.
  3. Minimum investment – savings accounts only require a small amount to start, allowing a consumer to save for the future without making a significant commitment.
  4. Insurance – if consumers have their savings account with a member FDIC bank, their funds are insured up to the maximum limit allowed by law.


  1. Low return – although consumers can earn interest, they offer relatively lower rates.
  2. Taxes – there are no tax benefits for putting money into a savings account. In fact, if a consumer accumulates a big enough balance, they will pay taxes on the interest they earn each year.
  3. Minimum balance – most accounts have a minimum balance which, if the account falls below, causes the account holder to incur charges.
  4. Insurance limitations – While the FDIC does insure a certain amount of an account holder’s money, there is a maximum which can leave some funds unprotected.


ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  • For credit counseling, call 800-769-3571
  • For bankruptcy counseling, call 866-826-6924
  • For housing counseling, call 866-826-7180
  • Or visit us online at

About American Consumer Credit Counseling

American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft,  senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to or visit