- Download PDF
1 Answer | Add Yours
Consumer and business bank accounts are normally divided into checking and savings accounts. In both cases, the business, or individual, deposits money into the account. The bank holds the money, and the user can withdraw it subject to certain conditions.
Savings accounts which often accrue interest, are intended as places to save money for medium term expenses or emergencies, and often pay a small amount of interest. They are not designed for frequent withdrawals or to be used for everyday transactions such as grocery shopping, and often charge high transaction fees for more than a few transactions a month.
Checking accounts, now usually linked to ATM cards and often online payments, are highly liquid and designed as a way of making payment for daily activities where cash would be inappropriate or inconvenient. Checks are pieces of paper issued to you by your bank that you fill out to authorize payment from your account to a third party. In the United States, checks are the same size as paper currency.
The British spelling, cheque, is also used in Canada. It is pronounced identically to and means the same as the U.S. "check."
We’ve answered 324,354 questions. We can answer yours, too.Ask a question