Q. What are financial institutions?
Answer: Financial institutions are businesses that offer services such as checking and savings accounts, car loans, home mortgages, credit cards, and retirement and investment services. There are several types of financial institutions: banks, savings and loan associations and credit unions. Many of these institutions offer the same services.
Banks and savings and loan associations (S&Ls) are
businesses that operate under federal and state laws. They are closely regulated so your money is safe. They offer loans, credit cards, safe deposit boxes, investment services, and
checking and savings accounts that are insured by the federal government.
Credit unions are not-for-profit, member-owned cooperatives that operate under federal or state laws. They
serve members who have something in common, such as working for the same employer, belonging to the same group or living in the same community. They are closely regulated so
your money is safe. Most credit unions offer loans, credit cards, and checking (share draft) and savings (share) accounts that are insured by the federal government.
Many other businesses, including post offices, grocery stores, wire services, finance companies, pawn shops and check cashing outlets, sell money orders and cash checks. Check
cashing may be free or for a fee. A few states regulate fees charged by check cashing outlets and wire services. There are no regulations for check cashing fees charged by other businesses. Q. Why should I keep my money in a financial institution?
 Answer: Safety. The money you deposit in an institution is safe from theft, loss and fire. Keeping your money in an account is safer than keeping cash at home or carrying cash with you. in most cases, money in your account is protected by federal insurance.
Banks, savings and loan associations (S&Ls). and credit unions are businesses that operate under federal and state laws. They are closely regulated so your
money is safe.
Convenience. You can get your money quickly and easily. Institutions provide different ways for you to get your money. You can withdraw cash at a teller's window, a drive-up window,
an Automated Teller Machine (ATM) or by cashing a personal check. Cost. Keeping your money in a financial institution and using the services it provides is often cheaper than using other
businesses to cash checks or buy money orders. Check cashing for account holders is usually free. Using a checking account can cost less than buying a lot of money orders.
Compare what it costs you to cash checks and buy money orders for a typical month to the monthly cost of accounts offered in your area. Security. In a federally insured institution, your money is
generally protected by federal insurance up to $100,000 for each depositor. Most banks and savings and loans are insured by the Federal Deposit Insurance Corporation (FDIC).
Credit unions are usually insured through the National Credit Union Administration. There are some financial institutions that are not federally insured. Federally insured institutions
must display one of the logos shown at the bottom of this page. Other Financial industry Products. In addition to checking and savings accounts, most financial institutions offer a variety
of other products and services that you may want or need. For example, a car dealer or your landlord might want a check that guarantees payment. For a fee, a certified check is written on
your account and then is "guaranteed" by the institution. If you do not have an account, for a fee you can get a cashier's check or teller's check that serves the same purpose.
You can borrow money from your financial institution if you have a good credit history. Financial institutions offer a wide variety of loans and other forms of credit. Use credit
wisely. Avoid getting into too much debt. Financial institutions may offer investment products and services. You do not need to have an account with the institution to get many of these
services. The people selling investments (stocks, bonds and mutual funds) may not be employees of the institution. They must tell you if an investment is not insured. The right
investment for you depends on your needs, goals and how much risk you are willing to take. Never invest in something that you do not understand. You can also buy and redeem United States Savings
Bonds at many financial institutions (commercial banks and credit unions). For further information about U.S. Savings Bonds, contact the Bureau of Public Debt, Savings
Bond Operation Office, Parkersburg, WV 26106-1328 (or on the Internet at the U.S. Treasury Web Site
 Q. How do I choose an institution?
Answer: Shop and compare. This checklist may help you decide which institution is right for you.
- Does it offer services I need?
- Will those services make my banking transactions easier to perform.
- Is it close to home? Or work?
- Does it have reasonable hours?
- Does it have ATMs? If so, are they located near where I live, work or shop?
- How widely spread are their affiliated networks if I am abroad.
- Am I eligible to join a credit union?
- Do any employees speak my language? (If other than English)
- What kind of identification is required to open an account.?
- What, if any, fees will I be charged?
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