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All About Banks—Where Should You Keep Your Money?

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When choosing where to keep your money, there are a lot of factors to consider—whether you prefer a bank or a credit union, what fees you might encounter, and what kind of account you'd like to open, just to name a few.

Keep reading to learn more about choosing where to grow your money, common banking services, and banking tips.

Where to Grow Your Money

Banks and credit unions are businesses that offer a safe and secure place to keep your money safe—and to grow it. Both provide many services, including loans, credit cards, and checking and savings accounts.


Banks are for-profit companies—some of their income comes from lending money and charging fees. Account balances in banks are insured by the federal government up to a certain amount. Insured institutions must display an official sign showing they are covered by the Federal Deposit Insurance Corporation (FDIC).

Credit Unions

A credit union is a non-profit institution that is owned and controlled by its account holders. When you open an account at a credit union, you become a member of that organization. Most credit unions are insured by the National Credit Union Administration or NCUA.

Choosing a Bank or Credit Union

Instead of driving all over town to choose a bank or credit union, call ahead and talk to a financial services representative at the bank or credit union about your needs. Here are some important questions to ask when looking for a new financial institution.

  • What is the minimum dollar amount I need to open an account?
  • Is interest paid on the account?
  • Is there a monthly fee? If so, is there any way to avoid it?
  • What happens if my account balance falls below the minimum requirement?
  • What is the fee for using your Automated Teller Machines (ATMs)? What is the fee for using other banks' ATMs?
  • Is online banking available?
  • Is there a charge for overdrafts? What is it?

Opening an Account

To open an account, you'll need to provide documentation of your identity. Bring a picture ID and your Social Security number. If you don't have a driver's license, state identification card, or passport, call before you go to ask what you could use instead. You'll also need to bring the money (cash or check) that you plan to deposit into the account.

Common Banking Services

Different financial institutions provide different services, but each one nurtures and grows your money in a different way. Some common services you should be aware of include:

Checking Accounts

A checking account allows you to deposit and withdraw money and write checks to pay for purchases and bills. There are different types of checking accounts:

  • Joint accounts allow co-owners to have equal access to the account.
  • Many checking accounts have no monthly maintenance fees if you agree to have your paycheck or benefits check deposited directly into the account electronically, or if you meet the minimum daily balance requirement.
  • Some banks and credit unions offer checking accounts tailored to the needs of students. Talk to your bank representative to find out if a student account is available to you.

ATM or Debit Cards

A debit or ATM card is connected directly to your checking account. An ATM and debit card with a MasterCard or Visa logo on it isn't a credit card, but can be used wherever MasterCard or Visa cards are accepted.

Use your debit card:

  • At an ATM or point-of-sale terminal at a store, using your personal identification number (PIN) or your signature.
  • At stores and restaurants that accept credit cards, by signing a receipt.
  • If you can't use your debit card to make your student loan payment, you can register your checking account number and bank's routing number to automatically withdraw money from your account, similar to a debit card transaction.


Fees that you may be charged on your checking account or debit card may include things like:

  • Monthly service fees.
  • ATM fees. There may be different fees for using your institution's ATMs vs. other ATMs.
  • Non-sufficient funds (NSF) fees or overdraft fees. These are charged if you write a check or make a debit purchase for a larger amount than you have in your account.

Savings Accounts

A savings account at a bank or credit union is a safe and easy way to save money. In return for keeping your money, the bank pays you interest.

There are two ways interest can be calculated on your savings account:

  • Simple interest calculation means that interest is earned only on the amount you have deposited, also called the principal.
  • Compounding interest adds the interest earned to your account balance, and then you earn interest on that amount!

Money Market Accounts

Money Market accounts are a combination of a checking and a savings account. You can write checks and withdraw from this account like a checking account, and the balance earns interest like a savings account. Money Market accounts often require a minimum balance and may limit how many times per month you can withdraw money.

Certificate of Deposit

A Certificate of Deposit (CD) has no fees and may offer a higher interest rate than savings or Money Market accounts. However, you must leave your money in the account until the date the CD expires. If you withdraw money early, you'll pay a penalty.

Safe Deposit Boxes

Many banks and credit unions offer safe deposit boxes, which:

  • Can be a good place to store paperwork or items that would be difficult to replace in case of fire, flood, or theft.
  • May save money on insurance premiums if valuables are kept in a safe deposit box instead of at your home.

Banking Tips

Once your money is in the bank for safe keeping, nurture it and manage it wisely. Follow these tips to stay on top of your money.

For More Information

Want to know more? Watch these videos to find out more about banking services, how to balance your account, and choosing a bank.

Video: Banking services for students

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Video: How to balance your account

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Video: Five questions to ask when choosing a bank

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