Get started: Put your money in the bank!
In today's complex financial environment, a bank account is more than just a good place to keep your money. It's the foundation for building a solid financial framework that will pay off in countless ways during your lifetime.
Students and their families need to understand the importance of having a bank account so that they can manage their money more efficiently day to day, create a positive credit history, increase their wealth, and become financially prepared for the future. While some parents convey this information at home, others may not. So you can play a pivotal role in teaching students what they need to know to open a bank account.
If your students have never thought about having a checking or savings account, now is the time for them to explore these options. Your instruction can highlight the numerous benefits of having a bank account. The most fundamental advantages of bank accounts are their ability to keep money safe from loss or theft, to earn interest, and to eliminate the need for purchasing money orders (and the fees associated with them) or cashier's checks to pay bills.
In addition to these practical benefits, having a bank account brings several other advantages:
- the option of having a paycheck deposited directly to the account so that one does not have to make a bank visit;
- the ability to make electronic payments to creditors easily and inexpensively through the Internet;
- the opportunity to build wealth through interest earnings on savings;
- the establishment of a record of sound money management so that one can gain access to credit for expensive dollar purchases like cars and homes;
- the maintenance of records of financial transactions for tax returns or other personal needs; and
- the insurance of deposits up to $100,000 by the Federal Deposit Insurance Corp. (FDIC) for money kept in regulated financial institutions.
What kind of bank account should students and families choose? While most financial institutions offer many banking products and services, the two most common types are
- a checking account, which is most commonly used to take care of everyday transactions. Students can use a checking account for depositing their paycheck or paying their bills—the kinds of activities we all do on a frequent basis.
- a savings account, which provides students a place to set aside money for future purchases while earning interest on the balance in their account. Savings accounts are not designed for frequent withdrawals.
Both checking and savings accounts help customers manage their money, create a positive credit history, and increase wealth.
The starting point—opening an account
Having a bank account is virtually a necessity in today's world, and choosing a banking institution that meets your needs can yield huge rewards. For more information on how to open your first bank account, check out the related links.
By Jess Palazzolo, public information director, Atlanta