Why the Heck do We Need Banks?


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Banks, or depository institutions, are either for-profit or not-for-profit places where you can keep your money safe.  It can be really daunting to choose the right bank for your personal needs. So, let’s talk about the different types of banks.bank vs. credit union

First off, there are two types of depository institutions: Credit Unions and Banks. Credit Unions are not-for-profit and you must meet certain requirements to belong to them. For example, if your profession is a teacher or a member or your family is a teacher, you are able to qualify to join various credit unions.  Banks, on the other hand, are open to the public and anyone can join them, without stipulations.

Now that we know the basics about the kinds of banks, how do you choose the right bank to fit your needs?  Many banks offer some kinds of savings accounts and checking accounts.  They can also offer loans, investments, financial advice and counseling, and safe deposit boxes.  You may not care about these yet, but you might also want to look at some other things. For example, do they offer credit cards, debit cards, free checking, ATMs, online banking, or mobile banking?  These are different services offered by the institutions, and can make banking way easier.  Debit cards and checks are tied to a checking account and can make your life a little easier.  They work sort of like cash and can be used to pay for stuff.  The more ATMs your bank has, the better.  This means that you can go to an ATM owned by your bank and not have to pay ATM fees to other banks. Some banks have online and mobile banking, two really cool services.  Online banking can be used to transfer money to and from accounts and to check your balance quickly.  You can also pay bills using online banking.  Mobile banking is similar to online banking, but on a smart phone.  You can use this to keep track of your accounts and pay bills.

The last thing to consider when looking for a bank is location.  Does the bank have more than one branch? Do you have to bank in person, or can you bank online? Does the bank have branches in other cities or states? Is it close to your home?  How many ATMs does it have and where are they location in relation to the places you have to go during the day?  

Have fun when looking for the correct depository institution for you.  Hopefully this article helped.

Student Editor: