"savings" vs "cheque"?

Question

When you buy something using your EFTPOS card, they ask you "Savings" or "Cheque". Almost all my friends have a "savings" but I was just wondering, when would you get a cheque account, and what's the difference? I mean, what is the difference between the two anyway?

Answer 1

A savings account earns interest and a checking account doesn't. Banks tend to frown upon drawing out of your savings constantly, but it doesn't effect you financially. Under most circumstances you wouldn't be able to draw money out of your savings account without going directly to the bank. Your EFTPOS card works differently though. You shouldn't worry about it so much. I'd suggest opening up a savings account for actually saving money (and earning it through interest) and a checking for purchases.

Answer 2

Usually on a card your account is setup on the savings button by default.

If for example you have 2 accounts with the bank, you can have one account setup on savings and one on cheque so that you can access both from the same card.

So really no difference, it's just the name EFTPOS machines give them.