WalletPrep

PrintBack to the lesson

WalletPrep worksheet · Money basics

What is the difference between checking and savings?

Name ____________________ Date __________

Key ideas

  1. Checking is for spending this month. Your paycheck lands here. Your debit card, bill payments and rent come out of it.
  2. Savings is for money you keep. It sits apart from spending money and usually pays you a little extra for leaving it there.
  3. Insured accounts are protected if the bank fails. Deposits are covered up to $250,000 per person, per bank, per ownership category at insured banks and credit unions.

Vocabulary

Credit union
A not-for-profit financial cooperative owned by its members, offering checking, savings and loans much like a bank.
FDIC insurance
US government protection that repays your deposits if an insured bank fails, up to $250,000 per depositor, per bank, per ownership category.
NCUA insurance
Federal deposit insurance for credit unions, run by the National Credit Union Administration and backed by the full faith and credit of the United States.
Split direct deposit
A payroll setting that sends part of each paycheck to one account, such as savings, and the rest to another.

Work it out

Jordan just started a job that pays $1,800 every two weeks after taxes. He opens checking and savings at the same credit union and sets up direct deposit.

  1. Take-home paycheck
  2. Direct deposit to savings
  3. Lands in checking
  4. Half of rent
  5. Groceries, phone, bus
  6. Left in checking

Check yourself

  1. Which account should your rent and grocery money come out of?

    • A. Savings
    • B. Checking
    • C. A credit card
    • D. Cash at home

  2. Maria's $2,000 paycheck is split by direct deposit. $300 goes to savings. How much lands in checking?

    • A. $1,500
    • B. $1,700
    • C. $2,300
    • D. $300

  3. What does the routing number on your account tell the payment system?

    • A. Your account balance
    • B. Your credit score
    • C. Which bank or credit union holds your account

Your turn

Log in to your bank app and find your routing and account numbers. If you only have checking, open a free savings account and ask your employer to send a set amount, even $25, from each paycheck.

www.walletprep.com/learn/checking-and-savings-accounts/ · Free to print, copy and share for non-commercial classroom use.

Answer key

What is the difference between checking and savings?

Work it out

  1. Take-home paycheck$1,800
  2. Direct deposit to savings− $200
  3. Lands in checking= $1,600
  4. Half of rent− $950
  5. Groceries, phone, bus− $450
  6. Left in checking= $200
  1. Jordan gives his employer both account numbers and the credit union's routing number. He asks for $200 of each paycheck to go to savings.
  2. Checking gets $1,800 − $200 = $1,600. Rent and bills take $950 + $450 = $1,400, leaving $200 as a cushion in checking.
  3. His savings grows by $200 every two weeks without him moving a dollar.

Check yourself

  1. B. Checking Checking is built for money moving in and out every day. Savings is for money you plan to keep.
  2. B. $1,700 $2,000 − $300 = $1,700. The savings part comes off first and the rest lands in checking.
  3. C. Which bank or credit union holds your account The 9-digit routing number identifies the institution. Your account number then points to your own account there.