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Do you have multiple accounts that hold your money across different banks? If you’re like a lot of people, you keep one account for your savings, and yet another for checking. Some people have additional accounts for their retirement savings or after-tax investments—but that’s a whole different can of worms.

For those looking for a better way to manage their checking and savings, there’s another account that should be on your radar: a checking and savings account. It’s a hybrid between a checking and a high-yield savings account. You can write checks and they’ll even issue you a debit card. In this article, we’ll answer the question, “What is a checking and savings account,” along with a discussion of their benefits, how they’re used, and who might benefit from using this type of account.

What Is a Cash Management Vehicle?

A checking and savings account—also known as a cash management vehicle—is designed to manage cash, make payments, and earn interest. It’s a hybrid between a checking and savings account.

Cash management accounts typically come equipped with checking account features such as a debit card and ATM withdrawals. They also typically pay a higher rate of interest than keeping your money in a traditional savings account. If you have a checking account, you know how little they pay in interest; .08% is the national average .

Cash management accounts are often all-in-one accounts, and they can combine features of a checking account, brokerage account, and an interest-bearing savings account. (Not all checking and savings accounts include all these features, though.)

While checking and savings accounts used to be limited to those with high balances in brokerage accounts, this is no longer always the case. For example, online-only financial services companies are breaking the mold by offering similar accounts to those without a brokerage account or without having to meet a minimum balance requirement. They’re able to offer higher interest rates because they don’t maintain brick and mortar locations.

What to Look for in a Checking and Savings Account

While most checking and savings accounts share similarities, they won’t all be the same. Here are some items to consider when shopping around for a checking and savings account.

Safety

FDIC (Federal Deposit Insurance Corporation) insurance protects your money in the event your bank goes belly-up. For your safety and protection, it is essential that your checking and savings account is FDIC-insured. Some banks offer more coverage by using a system that spreads their deposits across several banks (this is done behind the scenes). For example, SoFi Checking and Savings offers $1.5 million in FDIC insurance per account.

Interest Rate

Generally, you’re able to get a higher rate of interest within a checking and savings account than you are with a savings account at a brick and mortar bank. This interest rate will likely not be as high as in an online-only savings account, the trade-off being that an online-only savings account will usually limit your access to your money. SoFi Checking and Savings has aspects of a high-yield savings account and a checking account.

Accessibility

When deciding on an account, you’ll want to investigate its accessibility. Cash management accounts usually offer either a credit card or debit card hooked up to the account, allowing you to use it as if it were a checking account.

Most will also allow you to withdraw money at an ATM and set up bill pay. (For comparison, some high-yield savings accounts only allow you to access your money a certain number of times per month. Limiting the number of transactions in an account allows them to offer a higher interest rate.)

Fees

As with most types of bank accounts, there is a possibility for fees, such as monthly or annual account maintenance fees, or fees to use out-of-network ATMs. Conversely, some checking and savings accounts will actually reimburse you for any ATM fees you incur.

If you travel internationally, also be sure to check the account’s policy on international transactions and ATM usage. SoFi Checking and Savings, for instance, reimburses 100% of all ATM fees, even internationally, on qualified accounts.

Bank Locations

Brick and mortar locations for checking and savings accounts are limited because in the past, most checking and savings accounts have been offered by brokerage banks. Brokerage banks do have physical locations, but they’re often limited to large cities.

If it’s important to you to be able to walk into a location, you’ll want to research whether there is on near you. Online-only banks specifically opt out of providing physical locations, often so they can offer more by way of interest rates. This will likely become more common as financial services move the majority of their operations online.

Who Should Use a Checking and Savings Account?

Because a cash management vehicle is a hybrid between checking and high-yield savings accounts, they would suit anyone who would like to consolidate the two. Most financially savvy folks understand that larger cash balances should be earning more interest than is offered in a “regular” checking account, but dislike coordinating checking and savings accounts at different banks.

Really, anyone looking to consolidate and elevate their finances should, at the very least, research a cash management vehicle to see whether it makes sense given their financial goals and the structure of their current accounts.

A checking and savings account is an excellent place to save up for short to mid-term goals, such as an emergency fund, a down payment for a home, for a wedding, or an exotic trip to celebrate paying off student loans.

As the landscape of financial services changes, it’s a good idea to stay up to date on advances in technology and improvements to the services provided to consumers. For a long time, brick and mortar banks had very little competition, as the physical locations (and convenience) were paramount to effective banking. As banking moves online, those with the most branches won’t necessarily be the ones providing the best customer service or the most competitive interest rates.

SoFi, who has been leading the charge in refinancing student loans to lower rates, is expanding its business to offer a checking and savings account that offers an interest rate competitive with high-yield savings accounts. They’re able to do so precisely because they don’t maintain physical branches—and understand the need for a more versatile checking and savings account that’s easy to use and and has no fees.

SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Neither SoFi nor its affiliates is a bank.
SoFi Checking and Savings^TM is offered through SoFi Securities, LLC, member FINRA/SIPC.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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When you become an official 30-something, the constant advice from parents, friends, and money experts to start investing in your future may sound like a broken record that you want to turn off. But they’re right. While you might think you still have plenty of time to start saving, consider this — one in three U.S. employees expects to work past age 70, and only 26% expect to retire before age 65.

Those are sobering statistics, especially when predicting how they might look for today’s young workforce. The good news is that even if you spent your 20s with a cavalier attitude toward finances, it’s not too late to shore up your long-term financial goals.

And just imagine following a financial strategy that takes you right back to that carefree lifestyle when you’re in your golden years — instead of having to take a part-time job to make ends meet.

Here is a list of 10 financial milestones to strive for during your 30s that can kick-start your savings, but let’s be honest — some of this might hurt a little. Saving money means sacrifice, compromise, and diligence, but always remember the end goal. Retirement. Complete, fully unemployed (unless you just really want to work), worry-free retirement.

1. Establish a Good Credit Score

We put this at number one because good credit can lead to better results with everything else finance-related. It determines the interest rate you’ll pay on a new car or house, (see number three), and how much you can save if you refinance your student loans (see number two). Bottom line, a good credit score equals cash saved.

And even better news? It doesn’t have to be perfect. A target score of 740 or more will put you into favorable range for lenders. If you have no credit or low credit, educate yourself on ways to improve your credit score. Find your current score via a number of free websites, including Credit Karma , and learn ways to better manage your debt.

2. Pay off Your Student Loans

This is a huge one. By the time you reach 40, you’ll be almost 20 years out of college: It’s time to graduate from that payment. One thing to note is that you don’t have to stick with your original payment plan.

Refinancing your student loan debt could lead to considerable monthly savings, even if the interest rate drops by just half a percentage point. SoFi’s student loan advisors can help you map out a way to refinance your debt, and remember that the higher your credit score, the better your rate will be.

3. Get Rid of the Credit Card Debt

High-interest credit card payments are among the most likely financial hurdles to keep you from getting ahead. If you are paying on several high-interest cards at once, SoFi can help you make a plan to get out of debt and stay out. A number of free debt calculators are available online to help you get a solid picture of your overall debt.

4. Invest in your Retirement

It might be one of the most frequently asked questions about retirement: How much savings should I have? The answer is based on your retirement goal, so a good way to answer that question is to start at the end and work all the way back to a monthly investment goal. Once you have that number in mind, take every opportunity to meet that number, and exceed it where possible.

Many employers offer 401(k) matching programs, and it’s a powerful tool for supercharging your investment. Consider contributing at least up to the amount of your employer match. Another easy way to invest is a high-yield savings account, which is a growing trend. If you’ve managed to eliminate or lower some monthly debt payments, consider putting at least a portion of your newfound cash into retirement instead.

5. Create an Emergency Fund

Living paycheck to paycheck can work for a while, but life is inevitably bound to happen. Unexpected medical bills, storm damage, sudden job loss, and a host of other scenarios could add a financial burden to your household if you aren’t prepared.

A good goal for an emergency fund would be six months’ income, and a high-yield savings account can help you get there faster. The key to a successful emergency fund is to resist the urge to dip into those funds for everyday use.

6. Establish a Monthly Money Routine

Especially if you are the type who can’t remember where all the money went last week, consider creating a budget for monthly management, and stick to it. A host of budgeting apps are available to meet your needs or your style, so set one up, turn on the notifications and make it your most-used app.

Think of it like calorie counting: Nothing goes in your body (or in this case, out of your bank account) without being logged. It creates financial discipline and good habits quickly, and may even become a fun challenge. As part of that routine, set reminders to stay on top of your bills, because late payments can negatively affect your credit score.

7. Become a Homeowner

The cost of a house down payment when your career is young can seem unachievable, but becoming a homeowner in your 30s, or even buying a house in your 20s, could be a smart investment. And it’s not as difficult as you think.

One way to start saving money would be to take any cash you save from refinancing student loans or consolidating credit card debt and set it aside for your down payment. If you’ve already learned to live without that money, it could be a relatively painless transition. SoFi’s home buyer’s guide has even more tips and advice to help you get started.

8. Protect your Life

Find out whether your employer offers life insurance and take advantage of it. Often, it is only a few dollars (if not pennies) per month, which is a small amount to pay for peace of mind. If you have family (or even if you don’t), also consider supplemental life insurance as well.

Establishing a life insurance plan in your 20s, when you’re the picture of health, can be a lot more affordable than waiting until health problems start to creep up.

9. Protect your Income

Signing on for your employer’s disability insurance plan pulls double duty because it not only gives you time off to get the medical help you need, but it also protects your job. Like life insurance, short-term and long-term disability plans can cost mere dollars per paycheck. Combined with the Family Medical Leave Act, you can be confident that your salary is secure. Think of your income as your biggest asset, and work hard to protect it.

10. Budget in Some Fun

Saving money can be a painful process that requires a lot of self-discipline and focus, especially when your friends are all meeting at the new restaurant in town and you’re staring at a frozen lunch. But hard work deserves reward, and money shouldn’t be all business.

Be sure to set aside a little bit of disposable income for yourself, and again, consider a checking and savings account to make your hard-earned money earn money.

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