Financial Education: Bank On It

Banking Basics | What is a Bank | Choosing a Bank | Accounts | Glossary | Resources

Bank Accounts

Bank accounts that allow you to add money to the account are called deposit accounts. Checking and savings accounts are two examples of deposit products. After learning about the different types of accounts, you can also learn about opening an account, the fees involved, other services offered by banks and the differences between check cashing services and banks.

Checking Account

A Checking account is an account that lets you write checks to pay bills or to buy goods. The financial institution takes the money from your account and pays it to the person named on the check. The financial institution sends you a monthly record of the deposits and withdrawals made. This is called a bank statement.

Savings Account

A savings account is an account that always earns interest. You cannot write checks on a savings account.

You can open a savings account with a few dollars, but you might pay a monthly fee if the balance is below a certain amount.

The bank will help you keep track of your account by either sending you a statement or providing you with a booklet called a passbook.

It is a good idea to compare rules of the different accounts. For example, banks might require you to have a certain balance to open an account, earn interest, or avoid fees. This might be called a minimum balance.

Non Deposit Products

Many banks also offer non deposit products and services that are not insured by the FDIC. Stocks, bonds, and mutual funds are examples of non-deposit investment products.

Bank personnel are supposed to provide a written explanation that the FDIC does not insure these products and the money you invest might lose value. You can find out more about these non-deposit products at your bank.

Do not buy any product or service you do not understand.