Tips on Choosing a Financial Institution & Getting a Bank Account

Having your own bank account is an important step in maintaining financial independence. While the process of opening an account is a simple one, the decisions involved in choosing a financial institution and an account that meets your needs require careful analysis of your situation and your options.

How do I know what type of financial institution I should use?

To help you decide whether a bank or credit union is right for you, consider their differences:

· Both can offer free or low-cost checking, but credit unions often offer higher interest rates on their savings accounts, potentially earning you more money.

· Because banks are often bigger, they can have more locations and offer more financial services than credit unions including things like: retirement planning and investor services.

· Both have ATM services, but banks often have more ATM branches than credit unions.

· Banks are owned by stockholders, while credit unions are owned by their members – those using their services.

What should I consider when I choose a financial institution for the first time?

Consider these questions to determine if a bank or credit union will meet your ongoing needs:

· Does the bank or credit union have locations that are convenient to your home and/or work?

· Will their business hours fit into your schedule?

· Are there fees and/or penalties associated with their different accounts? If so, what are they?

· Which accounts pay interest and what are the interest rates associated with those accounts?

· Will you receive checks or an ATM card so that you can access money when you need it?

· How many ATM locations do they have and are there any fees for ATM transactions?

· Do they have telephone or online banking available if you want to manage your money without going into the bank or credit union?

· Which banks do your friends and family use, and what do they like or dislike about them?

What type of account is right for me?

Most financial institutions offer basic checking and savings accounts.

· Checking accounts offer easy access to your money by writing checks or using an ATM card for withdrawals at an ATM machine. They may require a monthly fee and usually don’t earn interest.

· Savings accounts help you save the money you earn while paying small amounts of interest on your account. They have no monthly fees, but only allow access to your money through a few transactions each month and generally require keeping a minimum account balance.

Many financial institutions will link your checking and savings accounts for overdraft protection. So, if you accidently write a check for more money than your checking account contains, the bank or credit union will automatically move money from your savings account to cover the difference.

For more information about choosing financial institutions and other economic opportunities, go to the CFED website at www.cfed.org.

Any questions may be directed to: rsi5@srt.com