Financial Education: Bank On It
What is a Bank
Choosing a Bank
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
offered by banks and the differences between
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.
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
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.