Familiarizing yourself with banking basics can help you utilize banking services to their fullest potential.
Where to Open an Account
There are many types of banks where you can open an account, including:
Big banks: Large global or national banks have several branch locations and ATMs, are often household names and offer 24/7 customer service via phone. However, the downside to these banks is that you may have to pay higher fees than you would to credit unions or smaller banks.
Regional and community banks: These banks focus on smaller geographic areas, which is why they may offer services in several states or only one or two towns. They may form an integral part of the local economy as they help individuals and businesses function locally. While the number of services they offer may be less than what big banks do, they are more likely to approve loans and offer free checking accounts.
Credit unions: These institutions are similar to regional banks but differ in the sense that they’re not-for-profit organizations with a different ownership structure. Customers of a credit union become partial owners of the institution when they deposit money or open an account there.
In today’s digital age, online banks are also gaining popularity.
What to Look for In a Bank Account
This depends on how you plan to interact with your bank—are you going to visit a branch regularly, or do you prefer doing everything online? Apart from these, also look for:
– minimal fees (low-balance fees, monthly service charges)
– good interest rates (low rates on loans, and high rates on savings)
– special features (mobile deposits, refundable ATM fees)
Types of Banking Services
It’s a good idea to be clear about which banking services are important to you. Some of these are:
Borrowing money: Banks provide credit cards, home and auto loans, and lines of credit for starting a business. You could also consider alternatives like peer-to-peer loans, non-bank lenders, and the like.
Storing and saving money: Keeping cash in a bank is safer than carrying it around or even storing it under a mattress. If you deposit your cash in an account, you may never even touch cash again as you can transfer funds electronically.
Making payments, transferring funds, and earning interest are some other banking services you can utilize.