- What is a checking account?
- What is a checking account for?
- Difference between checking account and savings account
We explain what a checking account is, what it is for and the requirements to have one. Also, its difference with a savings account.
What is a checking account?
It is known as a checking account (abbreviated:cta. cte.) still contract banking that allows the account holder to deposit funds and dispose of them effectively, through various products such as stubs, checks, ATMs, bank windows or electronic transfers, but at the same time it does not generate any type of interests in favor of his person.
A checking account allows the user to have their money, purchase, pay taxes and make payments of other types of services own Bank, his account being income principal.
It is often associated with debit cards, credit cards, electronic wallets and other products. Usually, when you take out a loan, your installments are paid through discounts in a checking account.
To open a checking account various requirements are usually demanded, usually greater than a simple account of savingssuch as salary checks, credit record reviews, etc. And often the financial institution requires a minimum opening amount, if not a minimum balance (not to pay maintenance amount).
In some countries, such as Argentina, the current account is understood differently: as a line of credit opened in favor of the client, of which you can have up to a maximum amount, as long as you pay what is owed the following month without fail.
What is a checking account for?
As has been said, a checking account is a tool to more easily dispose of the money entered, which is usually accompanied by instruments such as checkbooks or credit cards.
Since a checking account does not generate interest in favor of the user, it is usually understood not as a deposit of savings, but money destined for their daily use, that is, an account in which money will enter and leave regularly, from which loans will be deducted, taxes, etc.
Difference between checking account and savings account
Savings accounts, unlike current accounts, are simpler financial instruments: bank deposits in which money is deposited that will be little mobilized (or less than current, at least), and therefore destined to grow.
Because they have a simpler process than a checking account, savings accounts do not receive financial instruments such as credit cards or checkbooks (usually only a debit card) since their purpose is the accumulation of capitals; For the same reason, they generate a specific monthly percentage of interest in favor of the holder, deposited at the end of the month in the account itself.