Cash Course: Using Financial Institutions

did you know that at least five percent of adults in America don't have a bank account that means that they're storing their hard-earned money in a piggy bank under a mattress or uh whatever that's called this is our secret spot it's very secure are you sure yep totally well most individuals and businesses store their money with the financial institution for safe keeping they deposit it in and withdraw it out whenever they need have you considered using a bank or a credit union what's the difference [Applause] Banks help protect your deposits from fraud and theft and offer access to all kinds of services like loss of branch and ATM locations online banking special accounts credit and debit cards and even big loans for cars houses or starting a business they're for profit and make their money mainly through various service fees and the interest charged on loans credit unions are similar to Banks but are usually exclusive to specific regions or Industries like firefighters teachers or Farmers unlike banks credit unions are generally non-profit so they tend to have fewer products beyond the basic accounts cards and Loans but since they aren't Under Pressure to make a profit they're able to offer their members a better deal when it comes to fees and interest rates are both Banks and Credit Unions safe like anything in life there's never no risk but government regulations set important rules for financial institutions which helps make them more trustworthy and even if your deposits are somehow impacted by theft or loss the U.S government ensures up to two hundred and fifty thousand dollars to Banks through the Federal Deposit Insurance Corporation also known as the FDIC and to most Credit Unions through the National Credit Union Administration or ncua this all adds up to a Dependable banking system which means your money is better protected and easier to manage that's something Mr Piggy just doesn't offer sorry almost every financial institution offers checking accounts and saving accounts a checking account is where your deposits and withdrawals generally happen sometimes there's a minimum deposit requirement a savings account is for you guessed it saving your money usually you earn a little extra money in this account thanks to interest but you may be limited in how often you can make withdrawals Credit Unions tend to pay higher interest rates than Banks into your savings account additionally most employers are able to directly deposit your paycheck into your bank or credit union account that saves you the trouble of having to manage the cash or attract yourself for simple account needs like deposits and withdrawals you don't have to wait in a long line during banking hours automated teller machines or ATMs are convenient ways for you to access your account on your own at any time Banks tend to have more ATMs and more locations than Credit Unions so do I need to withdraw cash every time I go shopping nope once you've got an account you'll probably get a debit card these handy little cards link directly to your checking account and allow you to pay for things using the money that you have available without having to actually carry the cash spending more than what you have in your account will result in penalty fees though so be careful all right all right how do we get started first determine your financial needs if you need access to more locations and ATMs or you like doing your money management online then a bank may be better for you if your needs are pretty basic and you prefer better rates and more personalized customer service then a credit union may be your best choice second get the details once you've picked your financial institution make sure you understand any fees limits or perks that come with the account you want to open or cards you want to use this will help you manage your money more carefully and avoid surprises third manage and monitor take advantage of any helpful money management tools or advisors that your financial institution makes available to you keep an eye on your accounts and if you see any suspicious activity notify someone at your bank or credit union that's why your money is there so they can help you protect it choosing what financial institution best fits your needs is a personal decision and when you find that right fit you'll be able to manage your money with greater convenience and have confidence that a bank or credit union is keeping it safe for you watch more at prageryoukids.com and parents don't forget to subscribe