Checking Accounts vs Debit Cards: How They Compare

Q: How are debit cards and checking accounts different?

Checking accounts are a way to store your money, while debit cards help you access that money for everyday spending. Prepaid debit cards, on the other hand, are not linked to a bank account. These cards are loaded with a balance ahead of time and can be used like a regular debit card to make purchases. The balance acts as your spending limit.

Q: Is a checking account basically a debit card?

No. While checking accounts and debit cards are related, they are two different products. A checking account is an account held at a bank or credit union that allows withdrawals and deposits. A debit card allows you to access the money in your checking account. Prepaid debit cards are yet another financial product. They are not linked to a bank account but instead are pre-loaded with funds. You can use these cards for purchases and to get cash just like you would a regular debit card. Instead of taking money from your bank account, a prepaid card uses the balance that was loaded onto the card.

Q: Are checking accounts safer than debit cards?

Both checking accounts and debit cards have security features, such as multi-factor authentication for your bank or the PIN you use with your debit card.

Bob HaegeleUpdated February 22, 2023

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

Checking accounts and debit cards are two essential tools for everyday money management. Checking accounts offer a convenient and secure place to store your money, while debit cards make it easy to access that money when you need it.There are many ways checking accounts and debit cards overlap, but there are also key differences between them. Here’s a closer look at how checking accounts and debit cards work, their similarities and differences, and how regular debit cards compare to prepaid debit cards.

What Is a Debit Card?

A debit card functions as a payment card that you can use in place of cash to make purchases (both online or in-person), as well as an ATM card you can use to withdraw or deposit cash at an ATM. Debit cards are typically linked to a checking account and draw funds directly from that account. However, you might also receive a debit card with a money market account, which is a hybrid checking and savings account.In general debit cards must be linked to a bank account in order to function. The exception is a prepaid debit card (more on that below).

How Debit Cards Work

If you have a checking and a savings account at the same bank, your debit card can typically be used to make an ATM withdrawal from either account. You’ll typically need to type in a PIN (personal identification number) to withdraw cash using your debit card. Your PIN is a security measure that verifies your identity.When using your debit card for an in-person purchase, you’ll swipe, insert, or tap at the card terminal just as you would with a credit card. You may also need to enter your PIN. Once your bank verifies you have the money to make the purchase (which happens digitally and nearly instantaneously), your transaction is approved. Unlike credit cards, you can only spend what you have available in your linked bank account. In some cases, you may be able to overdraft your account by a certain amount if you have the additional funds available in another account with the same bank, like a savings account, or your bank offers overdraft protection. However, the bank may charge you a hefty overdraft fee. Recommended: Do Credit Cards Have PINs?

Pros and Cons of Debit Cards

Debit cards have both advantages and disadvantages. Here are a few to consider.

Pros

Convenience Debit cards are generally accepted by most retailers and allow you to make purchases without having to carry around a lot of cash. When you do need cash, you can typically use your debit card at a wide network of ATMs.
No monthly fees There are typically no monthly or annual fees to own a debit card.
Spending limitations Unlike with credit cards, you generally can’t spend money you don’t have in your account with a debit card. This can help prevent overspending and running up expensive debt.

Cons

Security Consumer protections against fraud generally aren’t as robust for debit cards as they are for credit cards.
Overdraft and ATM fees While debit cards may not have monthly or annual fees, you can get hit with other fees, such as overdraft fees and out-of-network ATM fees.
Not ideal for big purchases While a debit card can be great for everyday spending, such as buying groceries or grabbing your morning coffee, using it for a major purchase, like a new couch, could deplete your checking account.

Prepaid Debit Card vs. Debit Card

Most debit cards are linked to an account, such as a checking account. When you make a purchase or get cash at an ATM, the money is withdrawn from the linked account.One exception to this is a prepaid debit card. You can purchase prepaid debit cards (also known as prepaid cards) from a retailer, bank, credit card company, or other financial services provider, both in person and online.With a prepaid debit card, you have to load funds on the card before using it (like you would when purchasing a gift card). You can typically use cash, electronic transfers, or checks to add funds to your card. Once the card is loaded and you’ve set up your PIN, you can use it to make purchases in-person or online. You can typically also use a prepaid card to withdraw money from an ATM.Like a regular debit card, a prepaid card allows you to make purchases without having to carry around a lot of cash. It can also be safer because if someone steals your card, they’ll need your PIN to make purchases.Unlike debit cards, prepaid cards often come with multiple fees. You might have to pay for activating or getting a card and making deposits. Some cards charge a fee for every purchase and ATM transaction.

What Are Checking Accounts?

A checking account is a bank account at a financial institution that allows withdrawals and deposits. These accounts offer a safe and secure place to keep your money, generally for short-term needs. Funds are federally insured for up to $250,000 per depositor at insured banks and credit unions. Checking accounts are highly liquid and allow easy access to your money when you need it. Since these accounts are designed for spending rather than saving, they generally pay little or no interest.Recommended: What Are High-Yield Savings Accounts?

How Checking Accounts Work

You can generally open a checking account at a traditional bank, online bank, or credit union. Once opened, you can use the account to set up direct deposit with your employer. You can access your funds by writing checks, making online payments, and using a debit card to make purchases and access cash at an ATM.Checking accounts often charge monthly service fees. In some cases, however, you can get fees waived by setting up direct deposit, keeping a certain minimum balance in the account, or making a certain number of debit card transactions per month.

Pros and Cons of Checking Accounts

Like debit cards, checking accounts have pros and cons. Here’s a look at how they stack up.

Pros

Easy access Checking accounts let you access your money in a number of ways. You can typically spend or withdraw money by visiting a bank, using your debit card at an ATM, writing a check, or making an online transfer.
Security Money in a checking account is secure, since it’s usually federally insured in the event of bank failure.
Direct deposit You can usually set up direct deposit into your checking account right from your employer. You don’t have to wait for it to arrive in the mail or remember to deposit it into your account. It all happens automatically. Also, the money is usually available to spend immediately.

Cons

Minimal interest Checking accounts typically pay little to no interest. Even “interest checking” accounts generally offer a very low annual percentage rate (APR).
Fees Some checking accounts have monthly fees, as well as other fees, that can eat into your balance.
Daily limits Because financial institutions only keep a fraction of their bank deposits on hand in cash, banks typically impose daily limits on how much money you can withdraw from your checking accounts through ATMs, as well as how much you can spend using your debit card. Limits will vary depending on the bank.

Debit Cards vs Checking Accounts Compared

Similarities

Both checking accounts and debit cards allow you to manage your money and make transactions, including withdrawals and point-of-sale purchases (but you need a debit card to make purchases from your checking account).
Balances are typically federally insured
Both have security features, such as a PIN for your debit card or data encryption when accessing your checking account online.

Differences

A checking account is a way to store your money, while a debit card is a way to access it.
Checking accounts let you write checks; debit cards don’t
You can receive direct deposits with a checking account, but not with a debit card (though you can often set up direct deposit with prepaid cards)
Some checking accounts have monthly fees, but debit cards usually don’t.

	Checking Account	Debit Card
Make in-store purchases	Yes (with a debit card)	Yes
Federally insured	Yes	Yes (if linked to a checking account)
Has security features	Yes	Yes
Stores money	Yes	No (except prepaid debit cards)
Check writing	Yes	No
Monthly fees	Varies	No
Direct deposit	Yes	No (unless a prepaid card)

Paying Bills With a Checking Account vs a Debit Card

In some cases, you may be able to pay a bill online either by e-check (which means transferring the money directly from your checking account) or with your debit card. It doesn’t make much difference which option you pick since the money will be coming from the same place (your checking account), and both options are secure. You may also be able to pay your bills using a prepaid debit card. In this case, the money will be deducted from the card’s balance, not from your bank account.Recommended: What Is Checkless Banking?

Relationship Between Debit Cards and Checking Accounts

Debit cards and checking accounts are closely related. Here’s a look at how they are connected.

Can You Have a Debit Card Without a Checking Account?

To get a traditional debit card, you will need to open a bank account that offers debit cards (like a checking account or money market account). To get a prepaid debit card, on the other hand, you don’t need to have a checking account. You simply need to find a place to buy the card and put money on it. As you use the card, the money gets subtracted from your balance. Since it's not connected to an account, when you don't have the money to pay for something, the transaction will simply get declined.

Can You Withdraw From a Checking Account Without a Debit Card?

Typically, yes. If your debit cards get misplaced, you can usually still withdraw money from your checking account by visiting a local branch. You’ll likely need to make the withdrawal from a teller by writing a check made out to “cash” or filling out a withdrawal slip. You may need to provide your account number and PIN and show a photo ID.Some banks allow you to use your mobile wallet to get money at an ATM, a feature called cardless ATM access. To do this, you typically need to add your debit card to your mobile wallet (such as Apple Pay or Google Pay). To get cash at an ATM, you would then open your mobile wallet, access your virtual debit card, tap your phone to the ATM’s NFC receiver (the four-line radio wave symbol), then enter your PIN.

Can You Have Multiple Debit Cards for One Checking Account?

Generally, you can’t have multiple debit cards for one checking account. One exception is a joint account, which will issue a card for each person on the account.Recommended: How to Get Cash From a Credit Card

The Takeaway

A checking account is a safe and secure place to keep your money, while a debit card is a useful way to access your money. Debit cards are usually linked to a checking account, but some debit cards, such as prepaid debit cards, don’t rely on a checking account. You preload funds onto the card, and can typically reload funds onto the card when the balance runs outs.While checking accounts (with debit cards) are helpful for managing everyday transactions, they aren’t ideal for storing your extra cash, since they generally pay little or no interest. To start building a nest egg for future needs, you may want to consider opening one of the top high-yield savings accounts. With Lantern by SoFi’s online banking marketplace, it’s easy to compare high-yield savings accounts based on APY, fees, and balance minimums.Lantern can help you compare online savings accounts and find today’s best rate.

Frequently Asked Questions

How are debit cards and checking accounts different?

Is a checking account basically a debit card?

Are checking accounts safer than debit cards?

Photo credit: iStock/zamrznutitonovi

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About the Author

Bob Haegele

Bob Haegele is a personal finance writer dedicated to helping others improve their finances, build wealth, and establish a stable, long-term financial plan. His expertise extends to topics such as investing, student loans, and credit cards, and his work has appeared on outlets such as Business Insider, Bankrate, GOBankingRates, and CreditCards.com.

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