Banks provide a range of financial instruments and accounts to fit the diverse needs of individuals and businesses.

Commercial banks make their money from the interest and fees they charge customers and on the investments they make. Banks, like any business for profitA financial gain, the excess of returns over expenditures, income over expenses. The opposite of loss. , are always looking for customers and so they advertise and offer products, services, and conveniences to attract new business. For an alternative to a commercial bank, see credit unionNot-for-profit cooperative of members with some common bond who, in effect, save their money together and make low-cost loans to each other. A financial institution. in the previous section.

Another institution offering banking services is the savings and loan, which traditionally invests its funds primarily in home mortgages.

“Shopping” for a Bank

It is important that consumers shop around for the goods and services they need, keeping in mind key features such as quality, good service, and the right price. The same applies when “shopping” for banking services.

Skills for Banking

  • Understand the services provided by banks and other financial institutions.
  • Review the questions you should ask before selecting a bank.
  • Compare the difference between a credit union and a commercial bank.
  • Describe ways that banks help you manage your money and analyze how your banking needs change over a lifetime.

Before selecting a bankAn institution, chartered by the state or federal government, that takes deposits and provides credit and other financial services. , consumers should compare and understand the services provided by at least three banks and other financial institutions. It is also important to keep in mind how your banking needs may change over time.

There are many factors that may contribute to your final choice including the location of the closest branch, the bank's hours of operation, as well as any fees and rewards associated with your account. Remember to ask the following questions before selecting a bank:

Your banking needs will change over the various stages in your life. Banks, credit unions, and other financial institutions offer a range of services and financial products to meet your needs.

Types of Accounts

As discussed above, there are several types of accounts, primarily a checking accountAn account that allows the customer to write checks on the money in the account. or savings accountAn account at a financial institution that earns interest and allows regular deposits and withdrawals. The minimum required deposit, fees charged, and interest rate paid vary among providers. , in different types of banks (commercial banks, credit unions or the savings and loan). To research more information on credit unions in your area, visit the National Credit Union AdministrationThe NCUA is an independent federal agency that charters and supervises federal credit unions and insures savings in federal and most state-chartered credit unions across the country. (NCUA) at www.ncua.gov. For a good resource to compare checking or savings accounts in your area, you can visit www.findabetterbank.com. This site provides a helpful comparison of fees and requirements and you may search by city or zip code. Also, some state governments have mandated that banks provide low-fee accounts to individuals with lower incomes. These type of programs are not often advertised. You can find more information on special programs by contacting your state banking department.

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