A savings account typically permits an account holder to make a limited number of free transfers and transactions, while a chequing account typically offers more freedom to write cheques and make unlimited debit transactions.
Savings accounts also pay lower interest rates than bonds or GICs, so they are not recommended for holding funds over long periods of time. Savings accounts are generally intended for use as storage accounts for money that is not intended for daily expenses.
Advantages to having a savings account
One of the main advantages of having a savings account is liquidity, with funds being available 24 hours a day through local branches, ATMs and over the Internet. Savings accounts can also be beneficial to people wanting to save money for specific expenses or long-term goals, such as saving for a down payment on a home, a future vacation or for building an emergency fund in the event of job loss or illness. Money deposited in a savings account will typically earn modest interest of, on average, 1-2%.
Opening a savings account
avings accounts are easy to obtain, don’t require a credit check and are a safe way to protect money in a bank. Most banks, credit unions and other financial institutions offer savings accounts. To open a savings account, a client simply has to present themselves at any branch and present a valid identification.