Digital Wallet vs. Bank Account: What’s the Difference?
Quick Answer
Digital wallets and bank accounts can both help you store and spend money. However, digital wallets are primarily meant as a replacement for the physical cards, keys and passes that you might otherwise need to carry. Bank accounts are offered as a safe place to keep your savings.

Digital wallets and bank accounts offer two different ways to store and use your money. Digital wallets can be a convenient option for keeping all your payment cards, loyalty cards and other information in a single app. And some let you add funds to the wallet itself. Bank accounts—there are several types—offer a safe place to store your money and potentially earn interest on your savings.
What Is a Digital Wallet?
Digital wallets are apps that let you electronically store the items you might keep in your wallet, such as debit, credit, transit, insurance, loyalty program and gift cards.
Digital wallets also support other types of cards and information, including event tickets, boarding passes, keys, passwords, employee badges and student IDs. Residents of some states can also create and add an electronic version of their driver's license or state ID to their digital wallet.
Popular digital wallets include:
Digital wallets have security features that help secure the information you add to the wallet.
For example, many use tokenization to keep your payment details secret. When you use a digital wallet to pay with a debit or credit card in the wallet, the wallet sends the merchant an encrypted token instead of your actual card information. The approach can protect you from card skimming and might make a digital wallet safer than paying with a physical card.
One limitation, however, is that digital wallets are still not accepted everywhere. Therefore, it's a good idea to also carry cash or a physical card as a backup in case you try to pay with a digital wallet at a store and the contactless card doesn't work.
How to Use a Digital Wallet
Digital wallets differ slightly in how they work and what you can do with the wallet. But you can often get started by creating an account online, and some of the more popular options, such as Apple Wallet, Google Wallet and Samsung Wallet, may come preinstalled on your phone.
Once you've set up your wallet, you can:
- Add cards and information. You may be able to add debit and credit cards to your wallet by scanning the card and verifying the information. There may also be an option to connect your wallet to your bank or credit card's mobile app, or an option within that app to add a card to your digital wallet.
- Add funds. Some digital wallets let you store money in the wallet. You can then use the stored funds to make purchases instead of using one of your connected payment cards.
- Make payments in stores. Once you add a payment card or funds to your digital wallet, you can access it via the wallet app on your smartphone or smartwatch. After unlocking your account by scanning your face or finger, or entering your PIN, you can tap your device on a point-of-sale terminal to pay.
- Display stored information. You can unlock your digital wallet to reveal and use other items in your digital wallet, such as event tickets and boarding passes.
- Make payments online. Depending on the wallet you use, you might see it pop up as a payment option when shopping on your phone. Select the wallet during checkout and follow the prompts to log in or verify your identity with biometrics.
Sometimes, there are also ways to use your digital wallet without having to unlock your phone or smartwatch. For example, you might be able to use it to pay for transit in certain cities with a quick tap, or use digital keys you added to the wallet to automatically unlock your car when you're nearby.
What Is a Bank Account?
A bank account is a deposit account that you can open with a bank or credit union. There are many types of bank accounts, including:
The two most common are checking and savings accounts.
Checking accounts tend to be for everyday expenses. The money in the account usually doesn't earn much interest, but you can easily access it with a connected debit card or check.
Savings accounts tend to be for short- and medium-term savings goals. You can't easily spend the money in your savings account using a debit card, but you can earn interest on your savings—sometimes a lot if you have a high-yield savings account.
Most bank accounts are FDIC insured, and up to $250,000 per depositor, per account ownership category and per bank is guaranteed by the FDIC. This can make bank accounts a safe place to keep your money even if the bank fails.
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