Checking vs. savings: the right setup

Checking accounts are designed for daily transactions — paying bills, swiping a debit card, getting cash. They typically pay near-zero interest. Savings accounts are designed for storing money. They pay more interest but limit how often you can withdraw.

The right setup

1. Checking account at any major bank — keep enough for one month of bills
2. High-yield savings account at an online bank — emergency fund and short-term savings
3. (Optional) Brokerage account — long-term investments

Why the split matters

If you have $20,000 sitting in a Bank of America checking account at 0.01% APY, you're earning $2/year. Move that to a high-yield savings account at 4% APY and you'd earn $800/year. Same money, same liquidity, just better placement.

Friction is a feature

Keep your savings at a different bank than your checking. The 1-2 day transfer delay isn't a bug — it's a built-in cooling-off period that helps you avoid impulse spending.