"A penny saved is a penny earned" or so they say...
But you want to save more than a few pennies, so your piggy bank won't be enough. You need a bank account!
Ask yourself the right questions to find out which type of account meets your needs.
Why Do You Want A Bank Account?
Do you want to...
not carry cash?
pay bills online?
keep your money safe?
make your savings grow?
Where Should You Keep Your Money?
Physical Banks:
They've been around the longest
You can visit them in person for transactions and questions
Many offer online banking options to make deposits, pay your bills, etc.
Their fees are typically higher than those of online banks and credit unions
Online Banks:
They're strong competitors to traditional banks
You can only contact them online or by phone
Depositing and withdrawing cash can be challenging
Their fees are usually lower than regular banks and credit unions
Credit Unions:
They're non-profits and maintain strong relationships with their communities
You can visit them in person for transactions and questions
They may have limited banking services and options
Their fees are traditionally lower than those of physical banks
Pick a bank insured by the Federal Deposit Insurance Corporation (FDIC), as that government agency will protect your deposits (up to $250,000) in case of a bank failure
Credit unions that are insured by the National Credit Union Administration (NCUA) offer a similar type of protection
Quiz
Ryan needs a bank. He wants to go with an online option since he's tech savvy and plans to use his phone to manage most of his transactions. But he's concerned about not having access to ATMs when he needs cash. What's the best option for him?
What Type Of Account Should You Open?
Most people have one or both of these two types of accounts:
Checking Account
Best for everyday spending money
Allows for numerous deposits and withdrawals
Not much interest, if any
Higher fees
Savings Account
Best for emergency funds
Allows for more limited deposits and withdrawals
Higher interest rates
Lower fees
Some banks waive some of their fees if you keep a minimum balance and/or set up a direct deposit!
Quiz
Lucy isn't sure what kind of account she wants to open. She'd like to pay bills online, but also put away some of her monthly paycheck towards buying a car. Which account is the best fit for her needs?
Take Action
Are you now ready to choose a bank account?
Check out these Bytes for more banking advice:
Your feedback matters to us.
This Byte helped me better understand the topic.