SELECT YOUR LANGUAGE

A bank is a financial institution that is licensed to accept checking and savings deposits and make loans. Banks also provide related services such as: individual retirement accounts (IRAs), certificates of deposit (CDs), currency exchange, and safe deposit boxes.

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There are several types of banks: retail banks, commercial or corporate banks, and investment banks.

In the United States, banks are regulated by the national government and by individual States.

Checking accounts are deposits used by consumers and businesses to pay their bills and make cash withdrawals. They usually pay little or no interest and could come with monthly fees, usage fees, overdraft fees, and insufficient funds fees.

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People generally have their paychecks and any other regular payments automatically deposited in a bank checking account.  A savings account pays interest to the depositor. Depending on how long account holders hope to keep their money in the bank, they can open a regular savings account that pays a little interest or a certificate of deposit (CD) that pays a little more interest. The CDs can earn interest for as little as a few months or as long as five years or more.

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It is important to note that the money in checking accounts, savings accounts, and CDs are insured up to a maximum of $250,000 by the federal government through the Federal Deposit Insurance Corp. (FDIC). Banks also make loans to consumers and businesses. The cash that is deposited by their customers is lent out to other customers at a higher rate of interest than the depositor is paid. The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the U.S. financial system.

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Before choosing a bank, you should make a comparison of the various fees and charges that come with your accounts or any loans you might need. Doing the research first to compare the banking benefits to you and your family will help to ensure that you find the right fit for safeguarding your money, establishing credit, paying bills, applying for loans, receiving funds, and saving money for your future needs.

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By Jason Torrents