Checking Account | Definition


A checking account | expense | economy | pension | bitcoin | 401(k) | lender | wealth | return | grant | asset | check | fafsa | will | wage | fdic | bank | loan | bond | fund | spac | debt | loan | atm | definitionsis a deposit account held at a financial institution (bank) that allows withdrawals and deposits. Also called demand accounts or transactional accounts, checking accounts are very liquid and can be accessed using checks, automated teller machines (ATMs), and electronic debits, among other methods.

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Did You Know

A checking account differs from other bank accounts in that it often allows for numerous withdrawals and unlimited deposits, whereas savings accounts sometimes limit both.

A checking account is a transactional account for facilitating the easy use of your liquid assets (i.e., cash). Another way to think about it is that checking accounts are like the gateway into your money accounts. When you want to access your funds via a debit card transaction, the money will be coming from your checking account.


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Checking Account vs. Savings Accounts


Savings accounts are different than checking accounts in several ways.


Savings accounts are usually interest-bearing accounts. While checking accounts will sometimes pay a little bit of interest, savings accounts are interest-paying accounts. Even though savings yields have been relatively low for a while, you generally get a higher interest rate in a savings account than in a checking account.


Savings accounts are for parking your money long term. On the other hand, checking accounts are meant for quick use of funds. That means that, usually, funds can only be deposited or withdrawn from a checking account. While some bills can be paid directly from a savings account, many businesses will not withdraw funds unless it is from a checking account.


Savings accounts are harder to access than checking accounts. When you go to a bank, it is easy enough to withdraw from a savings account, but by definition, you can’t write checks from or use a debit card to pay from a savings account. When you write a check or use your debit card, the money is withdrawn from your checking account.


The difference between a standard savings account and a checking account is becoming blurred. While money market accounts or certificates of deposits (CDs) are distinct types of savings accounts, a standard savings account has become much more accessible and usable, like a checking account, in recent years, with the ability to pay bills from savings accounts directly.


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Woman using her debit card


Using a Checking Account


The main feature of a checking account is the ease of transactions. Below are four ways checking accounts can make transactions easier.


1. Deposits and Withdrawals


When you deposit funds in the bank, they will often place it into your checking account unless you specify otherwise. The same thing can be said for withdrawals.


2. Direct Deposits


While some businesses now support direct deposit into a savings account, it is more common to need a checking account to receive direct deposits from an employer.


3. Debit Cards


Debit cards are always attached to a checking account. So to use your funds in a transaction, you must have money in a checking account. Your debit card also gives you access to withdraw from an automated teller machine (ATM). In some cases, an ATM machine may ask which account you’d like to withdraw money from, and you can choose between multiple accounts, like your checking account and savings account.


4. Checks


Checks are what give checking accounts their name. By writing a check and depositing it, the funds are withdrawn from your checking account, making it an easy transaction. 


Man writing check


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CapWay Money Account


The CapWay Money Account is a convenient and useful checking account. You can access your account through both a physical and virtual debit card, and you can get paid early on your direct deposits. There are also helpful tools to track your spending and your progress toward money goals.


With the CapWay Money Account, you can send and receive money directly from your checking account just like other popular money-sending apps. Depositing and withdrawing funds is easy with more than 30,000 Money Pass ATMs throughout the United States, and there are no hidden fees or overdraft fees.

Download the CapWay App

Access more features to your Money Account

  • Money Goals
  • Request Money
  • Categorize Spending
  • Money Talk

The CapWay, Inc Debit Visa Card is issued by Metropolitan Commercial Bank (Member FDIC) pursuant to a license from Visa U.S.A. Inc. “Metropolitan Commercial Bank” and “Metropolitan” are registered trademarks of Metropolitan Commercial Bank ©2014.

1. For Money Account holders with a negative balance, the CapWay debit card will go into freeze until funds are deposited to bring account back to current. See terms and conditions

2. Sending or receiving money from other CapWay account holders will be instant. Transfers from other accounts could take up to 48 hours, depending on the financial institution.

3. Early access to funds requires direct deposit. Early payment is not guaranteed and is dependent on the timing of payer's submission of deposits. We generally post such deposits on the day they are received which may be up to 2 days earlier than the payer's scheduled payment date.

4. Money Goals allows account holders to save money towards financial goals created within the CapWay platform. Funds can be transferred from your Money Account or saved through the rounding up of your transactions from purchases.

5. CapWay offers financial content through Learn Money free of charge, but may include advertisements through affiliates. Phunds, CapWay's literacy program and session, is paid content or co-branded content.

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