Bundlefi | Checking Accounts, Savings Accounts, and Loans

Checking Accounts, Savings Accounts, and Loans

Checking Accounts, Savings Accounts, and Loans

Financial options used to be a lot simpler. Once upon a time, people had one or two options for all of their financial management needs. They'd get their loans, open checking accounts, and take care of their other financial needs through the local bank. These days, banks have gotten bigger, the world has gotten smaller, and the internet has opened up a new world of choices. It's great to have options, but those options can get overwhelming fast. How does one choose the right bank with so many available possibilities?

It depends on what you need. When you look for a new financial institution, start with your most important need. Are you looking for a checking account, a savings account, or a loan? Each one comes with different considerations. Take a look at the differences below.

Checking Accounts, Savings Accounts, and Loans: The Differences You Should Know

Checking accounts, savings accounts, and loans are the primary offerings of any financial institution. While all these things deal with money, each one is a fundamentally different product. So let's start with the basics. By fully understanding what each product has to offer, you can find the bank or credit union that offers the best one for your needs.

Checking Accounts

If you're just starting out and don't have a checking account yet, you should get one as quickly as possible. Checking accounts offer the safest locations for people to keep the money that they use every day. Plus, they provide the convenience that you can't get from carrying and storing your own cash. With a checking account, the bank essentially stores your money for you. By using a debit card and/or setting up automatic payments, you can access your money whenever you need to pay bills or make purchases.

Savings Accounts

Savings accounts are similar to checking accounts because they provide a safe place for you to store your money. Unlike the money in your checking account, though, the money in your savings account is meant to stay put. It's there in case of emergency or if you need it to help fund a major purchase, but otherwise, it shouldn't move like the money in your checking account. Instead, it will earn interest. The longer you keep your money in savings, the more interest it will earn. Though you won't become rich off of this interest, setting up a savings account is the most low-risk way to grow your money.


There are two main types of loans: business loans and personal loans. However, you'll find a lot of variation within those two categories. For example, car loans and student loans are both personal loans, but student loans are typically much larger than car loans. In a business context, you can apply for a general term loan, but you can also seek more specific loans. For example, you might get an equipment loan for a new piece of machinery, or you might seek an open line of credit for your more common business expenses.

What to Look For

Whether you want a checking account, a savings account, or a loan, you should consider several factors to make sure that you get the most out of your banking experience. Some factors are more general, like good customer service. Others are more specific to the bank product that you're using. Again, think about your most pressing financial need and research your options based on that need first.

Finding the Right Checking Account

Overall, checking accounts are simple. You're mostly just looking for a safe place to keep your money, which is something you can get from any bank or credit union. However, some options are better than others, so here are a few things that you should keep in mind while looking for a checking account.

Starting Balances

Some banks have a minimum balance requirement for their checking accounts. If you can't meet that balance, then they won't let you open an account. You may also face fees if you can't maintain that balance. Other banks have no minimum starting balance. If you live paycheck to paycheck, research banks and credit unions that don't have a minimum balance requirement. Financial stress is hard enough without facing the possibility of extra fees. Besides, if you're paying a fee specifically for not having enough money, you're on the road to a cycle that's as cruel as it is absurd.

On the other hand, perhaps you can meet the minimum balance upfront, and you're not worried about dipping below that balance. In that case, if the bank in question offers everything else you need, there's no reason to cross it off of your list.

Overdraft Fees and Other Hidden Fees

Speaking of paying fees for not having enough money, you should know that some banks charge overdraft fees while others do not. If you have a negative balance in your account, some banks are happy to make that negative number even bigger for you. If there's any chance that you may overdraft at one point or another, check to make sure that your bank won't charge extra for it.

Rewards, Incentives, and Interest

On the other hand, some banks offer rewards and other incentives with their checking accounts. The banking industry is more competitive than it used to be, so many banks will sweeten the deal to earn more clients. For example, some banks may let you earn cash back on purchases that you make with your debit card. Others let you earn points that you can exchange for gift cards, song downloads, and similar offers. Some checking accounts even offer interest. These accounts may not be standard, but they're certainly worth looking for.

Online or Offline

Virtually all banks these days will let you check your balance and move money around online. Most banks these days also have apps for easy access. If you prefer online banking to banking in person, why not look into an online bank? Some banks go further than just offering online options: they exist entirely online. There are pros and cons to online banking, but since these banks don't have to pay rent on a brick and mortar building, you as a client may get to save money as a result. Sometimes, those savings can translate to better interest rates and rewards.

Finding the Right Savings Account

Everyone should have a savings account. A savings account can protect you from financial disaster in case of an emergency, and it can give you some wiggle room if you need to make a large purchase. Plus, again, your savings account will give you a simple way to start building your wealth. Savings accounts are fairly straightforward, but not all are the same. Here are some factors to consider when choosing your account.

Starting Balance

If you're thinking about getting a savings account, a lot of the most important factors are the same factors that you should consider when looking for a good checking account. One of those factors is the starting balance. Just like a lot of checking accounts, many savings accounts come with a minimum balance requirement. For some, meeting a minimum balance isn't a problem. Others need a little more help. Thankfully, there are banks that have either small or no minimum balance requirements, especially those that have special programs for children, students, and young adults.

Penalties and Maintenance Fees

You won't have to look for too many fees when you open a savings account. However, some do have penalties and maintenance fees for accounts that dip below the minimum balance. Just like with a checking account, if there's a chance that you'll have to pay money because you don't have enough money, it's best to check out other options.

High Interest

The more interest you earn on your savings account, the faster your money will grow. As you look at your savings account options, compare the different interest rates. In this case, the higher the better.

Finding the Right Loan

Next, there's the challenge of finding the right loan. Loans, unfortunately, aren't as straightforward as checking and savings accounts. You'll probably need to do a lot more comparing and contrasting before you submit your application. Start by researching different types of loans to figure out which one would suit your needs best. Then, consider the following factors.

Low Interest Rates

In some ways, finding a loan is the opposite of finding a good savings account. In this case, you're looking for low interest rates instead of high ones. You won't always get a lot of control over potential interest rates. Factors like credit score and collateral come into play. Still, some financial institutions offer better overall rates than others, so check out some reviews before you make a commitment.

Credit Score Requirements

Speaking of credit scores, those with poor or limited credit will have fewer options than those with good credit. However, a bad credit score won't necessarily prevent you from getting the loan you need, at least not if you go to the right source.

Understanding for "High-Risk" Businesses

If you need a business loan, you may or may not struggle to get one depending on your industry. A lot of banks -- particularly the large corporate ones -- automatically turn down loan applications from "high-risk" industry business owners. If you're in the restaurant or hospitality business, for instance, you may have a harder time getting a loan than someone whose company is more of a "sure thing."

That doesn't mean that all hope is lost. Again, it just means finding the right source. Some banks and credit unions have no problem loaning to "high-risk" businesses. Many of those institutions even have specific programs for riskier industries.

How to Find the Right Financial Institution

You read about different financial needs above. Now, what kinds of financial institutions work best to fit those needs? Here are some things you should know based on different financial scenarios.

Starting a High-Risk Business

Let's say you want to get started in one of the industries we mentioned earlier. Where should you look for a loan if most banks dismiss you based on industry alone? One option is to find a bank that's local to the region where you want to start your business. A local bank owner may realize how a business like yours could fit in well with the overall community, so you may have a better shot at the loan you need. You can also look into credit unions that serve your particular region or industry. These institutions can also have a better grasp on what a business like yours needs.

Loans With Limited Credit

What can you do if you need a loan but have limited credit or a bad credit score? First, consider why you have low credit. The answer may give you some clues about where to find a loan. For instance, do you have a low credit score because you're a student or just starting out? In that case, you might look for a credit union that serves students and young adults. Have you missed payments because someone owes you money or you've put money toward a community project? Then you may be able to explain your situation to local bank staff.

Checking Accounts With Incentives

Looking for rewards and incentives with your checking account? Take a look at online banks first. Online banks are relatively new to the industry. To gain momentum with young people, many of them have added rewards to their marketing campaigns.

Low Starting Balances

What if you want to start an account but don't have a lot of money to begin with? All of the institutions above -- community banks, credit unions, and online banks -- are great places to look into. You'll have a better chance of finding the best account for your needs at one of these places.

How to Get Started

Finding the right financial institution isn't easy. Since the best kind of search is a stress-free search, you'll need a service that will let you compare and contrast your options all in one place. That's exactly what Bundlefi is for. We have a database of the exact types of financial institutions that put their clients first: community banks, online banks, and credit unions. They may not take up as much space as megabanks and loan stores, but they go above and beyond for their customers, and they put money back into local economies instead of billionaires' pockets.

Want to learn more? Take a look at Bundlefi now to get started.