Having both a checking and savings account is often a good idea. A checking account is designed to help you deal with the cash inflows and outflows to run your life (writing checks, ATM/cash cards, automated bil payments). A savings account will pay interest on the money in it. There may be restricitons on how you can access your money in the account -- this allows the bank to pay you a higher interest rate. A bank or credit union usually has a range of accounts or set of acounts that will meet your needs. There are hybrid accounts that allow you to earn interest and write checks, have an ATM card, etc. A separate savings account can help you manage your money buy removing it from the one you use for your regular expenditures (you will be less likely to spend it!).