Lauren Smith, WalletHub Staff Writer
@laurenellesmith
Money is equally safe in a savings account or a checking account. Most savings and checking accounts are insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) up to $250,000. Additionally, both kinds of accounts offer principal protection, so your balance does not fluctuate because of market changes.
Checking vs. Savings Account Safety
| Safety Feature | Checking Account | Savings Account |
| Government-Backed Insurance | Up to $250,000 | Up to $250,000 |
| Principal Protection | Yes | Yes |
| Access to Funds | Regular Access | Access with Limits |
| Overdraft Protection | Yes | No |
Government-Backed Insurance: Both savings and checking accounts at FDIC-insured banks or NCUA-insured credit unions are protected up to $250,000. So, if the bank or credit union fails, the federal government guarantees the funds up to the insured amount.
Principal Protection: The money deposited in both checking and savings accounts remains stable and isn't subject to market volatility, like investments in stocks or mutual funds.
Access to Funds: Checking accounts are designed for regular transactions and easy access to your money. They often come with checks, debit cards, and an unlimited number of transactions. Savings accounts, however, might not offer checks or debit cards and can have monthly limits on withdrawals and electronic transfers.
Overdraft Protection: Some checking accounts offer overdraft protection services, usually via a linked savings account, credit card, or line of credit. This can help prevent declined transactions, but it can also lead to fees or interest. Savings accounts generally don't have this feature since they typically aren't used for direct payments or purchases.
You can compare the best savings accounts and the best checking accounts right here at WalletHub.
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