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Why Open a Bank Account?

Having a bank account is an important step in improving your financial wellness. A bank account can help you in the following ways:

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Keep Your Money Safe and Secure

  • Storing cash in your home puts your money at risk in the case of unexpected events like fire, flood, theft, or loss.
  • An FDIC-insured bank or credit union ensures that your money is protected.

Save Time and Money 

  • Getting your paycheck through direct deposit will ensure that money ends up in your bank account on time. Oftentimes, direct deposit will go through the day before, so you actually get paid sooner!
  • Check cashing can be expensive since they charge by the transaction. There are many free checking accounts available, ensuring that you keep 100% of your money.

Pay Bills Digitally

  • Paying your bills online helps you save time. You can pay bills using your phone, tablet or computer, making monthly bill-paying fast and easy.

Earn Interest

  • A savings account allows your money to grow over time by accruing interest.

Keep an Eye on Your Budget

  • A bank account allows you to easily track your spending and your account balance.
  • Many banks offer budget software to help you see where you’re spending money and identify areas where you can cut back. 

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Bank vs. Credit Union

You can open a bank account at a bank or credit union. By choosing a bigger bank, you may have more access to advanced technology and a wider range of financial services, but you may also face stricter borrowing rules and be supporting a corporation rather than a community-owned financial institution. By joining a local credit union, you can support your community and access financial services that prioritize your needs, rather than profits.

Here's a comparison of the two:

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Characteristic Bank Credit Union
Offer a safe place to keep your money
 X X
Insured by the Federal Government X X
Offer checking accounts X X
Offer savings accounts X X
Offer other financial services X X
Allow you to withdraw money when you need X X
Offer many locations X
Strict rules on borrowing money X
Often a big corporation X
Great option for union members X
Good for those who want to stay local X
Good for those who want a community feel X
Owned collectively by its members; is a nonprofit X
Lower rates and fees X

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Checking vs. Savings Account

There are two types of basic bank accounts: checking and savings. Let's compare them:

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Characteristic Checking Account
 Savings Account
Best for spending (paying bills, withdrawing money, etc.) X
No withdrawal limits
 X
Pays interest sometimes, and only minimal
 X
Provides a debit card and paper checks
 X
Overdraft Protection
 X
Direct deposit
 X X
Online and mobile banking services
 X X
Monthly maintenance fee unless amount is above certain minimum
 X X
Best for saving money for the long term
 X
Limited # of withdrawals allowed per month (usually 4-6)
 X
Always pays interest, at varying percentages.
X

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Having a checking account is a great way to learn how to manage your money and take control of your finances.

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By finding a savings account with no fees and a high interest rate, you can save money more easily and watch your savings grow over time.

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