Checking Vs. Savings Accounts

There are a lot of tips with suggestions for using a separate -Savings- account to pay bills with- So I thought I'd add this little tip.

Savings accounts-
Pro's: You can pay bills with savings accounts, and even pay bills Via 'Check-by-phone' payments, you just give them your regular routing number, and then your savings account number. You must establish weather or not your bank allows these transactions, but most do. You never see the balance in your checking and you're not tempted to spend it.

Con's: A savings account is something the bank can use to determine if they will give you a loan. They look at how often you make deposits, and how long those deposits remain. A Savings account will normally have a 'Minimum Balance' you must maintain to keep the account open. It's a pain to find your automatic payments have come to a screeching halt because you forgot to keep $25US in the savings account. You don't get a checkbook with a savings account.

Checking Accounts-
Pro's: No limitations on types of transactions; credit, debit, checks, check-by-phone, and direct-debit(auto payments). No minimum balance on most checking accounts. Most banks will give you both a Primary and Secondary checking account if you ask them with no additional charges. A Secondary Checking account will have a separate statement each month so you can easily see if all of your payments were made on time.

Con's: Another charge for checkbooks, if you need them. It's another account to keep track of.

So when you break it down sometimes the Savings account isn't helpful to your situation. But in some cases where there is no minimum balance or credit issues, this is a most beneficial solution for most people.

Procrastination Takes Time.
Posted on 18-01-2008 07:24 | 0 Comments | Favorited 1 times | Marked 0 times as inappropriate


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