What is a checking account?

A checking account is a transactional bank account through which a person can make deposits and withdrawals of money, according to Investopedia. The money held in checking accounts is considered highly liquid because the account owner can easily withdraw it via checks or electronic debits.

Because of their high level of liquidity, checking accounts typically pay a very low interest rate on account balances. Checking accounts are available for individuals, joint owners, students and businesses. One key difference between a checking account and a savings account is that checking accounts often allow unlimited transactions, whereas savings accounts sometimes impose limits, according to Investopedia.