Question

Compare and contrast the risks, advantages, fees and APR's on savings accounts, checkings accounts and a DDA.

Answer 1

A checking account is a type of bank deposit account that is designed for everyday money transactions. The money in a savings account, however, is not intended for daily use, but is instead meant to stay in the account — be saved in the account — so that it might earn interest over time. Savings accounts have higher interest rates than checking accounts, meaning it is better to let large sums of money (e.g., an emergency fund) sit in savings instead of checking. The fees and other criteria for checking and savings accounts — such as monthly account maintenance fees, minimum account balances, and interest rates — vary slightly from one bank to another.

Particulars	Checking account	Savings account
Withdrawal Restrictions	None	Typically 3-6 withdrawals a month. Allowed to withdraw only a portion of the account balance.
Minimum Balance	Sometimes, varies by bank	Sometimes, varies by bank
Designed For	Regular use	Saving money risk-free for short- or long-term
Fees	Sometimes, varies by bank	Sometimes, varies by bank
Overview	A type of bank account that is designed for everyday money transactions.	An account that accrues more interest than a checking account does; intended for saving money.
Access	Any time	To use money, account holder must first transfer it to checking account (usually)
Other Features	Overdraft, external online transactions (money transfer, manual/automatic bill pay)	No facilities other than internal online transactions with some banks (i.e., transfer from savings to checking)