Banking has become big business. There are many different banks to choose from, each with their own unique offerings and promotions. Some banks may try to entice you with a low interest rate, while others may wave service fees for a given period of time.
With so many different choices it can be overwhelming to choose where to bank and what type of account would best serve your financial needs. Keep reading to find out the basics about banking so that you can figure out what banking options may best suit your financial needs and personal goals.
Opening a Bank Account
Opening a bank account is a smart financial move no matter how little or how much money you have. It gives you a secure place to store your money, can accumulate interest, and can make other banking transactions easier such as automatic payroll deposit and paying bills.
A savings account can allow your money to grow, getting you closer to your financial dreams. It doesn’t matter what you are saving for, a savings account can create positive financial habits. If you aren’t used to putting your money towards savings you may want to start small. This way you can increase the amount that you are saving over time without feeling strapped for spending money. There are many personal reasons that you may want to open up a savings account including creating an emergency fund, vacation fund, retirement savings, college savings and more.
Setting savings goals is also a positive way to encourage yourself to save. Once you achieve a certain savings goal you can treat yourself, or raise your goal to continue saving. If you are someone who has difficulty saving you can always set up automatic transfers to your savings account. You can allocate whatever amount of money you want to be deposited directly into your savings account. This way you will not see the money so you will not be tempted to spend it, making saving that much easier.
A checking account allows you to make easy withdrawals and deposits. A checking account is intended to keep your money in a more fluid state, allowing you to use the money easily to pay debts, write checks and more. A checking account allows for you to make many withdrawals and transactions without having to worry about being penalized with high service fees. Since you can access your money more freely using a checking account the interest rate is generally not very high. A checking account is a good way to keep your money secure while maintaining easy access to it.
Banking has never been easier thanks to online banking. Online banking allows you to securely transfer money, pay bills, shop online, view your balances, and much more from the comfort of your own home. Most banking institutions will offer online banking services for free or a nominal fee. It is always important to make sure that you are accessing your banking information on a trusted platform. Create strong and secure password to keep your financial information private. You can easily check bank statements and transaction history without having to pay for paper copies using online banking.
A credit union is different than a bank because they are community-based, rather than a profit oriented financial institution. A credit union is owned by members and works to provide services to support community development and serve its customers to the best of its ability. Credit unions offer the same financial services as a regular bank, but often use different terms for specific accounts.
When you are looking at your banking options consider your personal needs and financial goals. Shop around and compare different financial offerings that various financial institutions are proposing so that you can bank with confidence.