Educational Resources: Bank On It

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

What is a Bank?

A bank is a business that offers you a place to keep your money and uses it to make more money. This business is also called a financial institution. Banks offer different services for keeping your money at their business. Reasons why you should keep your money in the bank include:

• Safety - Money is safe from theft, loss and fires.
• Convenience - You can get money quickly and easily.
• Cost - Using a bank is probably cheaper than using other businesses to cash your check.
• Security - The basic insured amount of a depositor is $100,000. This means that if for some reason the bank closes and cannot give its customers the money they had in the bank, the Federal Deposit Insurance Corporation (FDIC) will return the money to the customer.
  
  You can tell if the FDIC insures a bank by the FDIC logo. Similarly, the National Credit Union Administration (NCUA) insures most credit unions.
• Financial Future - Building a relationship with a bank will establish a record of paying bills, can help you save money, and is necessary for getting a loan.

There are many types of banks available for you to choose from.