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Personal Finance Courses: Managing Your Money at a Bank or Credit Union

Introduction to Managing Your Money at a Bank or Credit Union Establishing a Relationship with a Bank or Credit Union How to Choose Bank Accounts to Meet Your Needs Understanding Bank and Credit Union Fees Opening Accounts at a Bank or Credit Union Check Cashing Stores Managing Your Bank Accounts Responsibly Overdrafts on Your Checking Account Checkbook Simulation Activity Summary of Managing Your Money at a Bank or Credit Union
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Establishing a Relationship with a Bank or Credit Union

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Establishing a Relationship with a Bank or Credit Union

A few of the key benefits of establishing a relationship with a financial institution are:

  • You own and control your accounts and money.
  • Your money is safe. Your deposit balances at your bank or credit union are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration up to at least $250,000. Depending on how you title your accounts, the protection limits can be much higher.
  • You have access to financial services professionals to help you manage your money.
  • Financial institutions offer other important financial products and services like credit cards, mortgages, auto loans, and investment services you will likely need over your lifetime.
  • Most financial institutions offer online and mobile apps that allow you to conveniently access, monitor, and manage your accounts.

The earlier you begin using a financial institution and its products and services, the more comfortable you will be managing your day-to-day finances. Additionally this allows you to build a strong foundation with a financial institution that knows you and can validate that you manage your accounts responsibly. This will come in handy as your financial needs become more complex. When it comes time to borrow money for important purchases like a home, car, or to start a business, having a financial institution that knows you will give you a head start in the process.

What factors should you consider?

There are many factors to consider in determining how to select financial institutions that meet your needs. The factors below will help you make a good decision.

  • Convenience. Look for financial institutions you can easily visit if you need assistance or need to complete transactions in person.
  • Service. If quality customer service or the ability to meet with someone face to face is important to you, be sure to kick the tires of the financial institutions you are considering to ensure that the staff is friendly, helpful, and knowledgeable.
  • Interest rates. What interest rate is paid on the various accounts they offer and how does that rate compare to the competition? Earning interest on the money you keep at a financial institution is an important way to grow the money you are saving.
  • Fees. Look for accounts that have no fees for students or accounts that waive fees if you meet certain requirements. Many financial institutions will waive monthly service charges if you have your paycheck direct deposited or if you maintain a minimum balance in your account. Look for institutions with low minimum balance requirements. Many of them will look at all of the balances you maintain at their institution, and if they meet a certain threshold, your accounts will not be charged any monthly maintenance fees. Be sure to have a strong understanding of how you avoid fees.
  • ATM fees. If you have your accounts at a bank, when you use an ATM from a bank other than the bank where your account is, you will likely pay a fee every time you conduct a transaction. If you need flexibility to access ATMs in many different locations, look for a bank that has a lot of ATMs available. Otherwise, use the ATM at your bank to avoid costly fees.
  • Credit unions. Many credit unions are part of a co-op that allows any of their members to use ATMs at any credit union in the co-op surcharge-free. In other words, if you use an ATM at a credit union other than yours, you likely will not be charged an ATM fee. Ask your credit union if they’re part of the co-op.
  • Check order fees. While fewer transactions occur by writing a check, if you have a need to write checks occasionally, look for financial institutions that give you your first order of checks for free or that have a low-cost option for checks.
  • On-line banking/mobile banking. Most financial institutions offer both of these. These are key services you can use to easily monitor and manage your accounts. You can also make certain deposits and withdrawals completely online. There are some banks that are online only, meaning there is no physical location for you to go to. Although these banks might offer higher interest rates and fewer fees, they might also offer fewer services, a lag in accessibility of your money, and less customer service.
  • Banking by phone. It is a good idea to look for financial institutions with a toll-free line to call after normal business hours in case you need service.

It’s easy to research the features and benefits offered by a financial institution. The easiest ways are to research online or visit or call a nearby branch and talk to one of the financial professionals. Additionally, ask people you trust in your community whom they would recommend as a quality financial institution. Referrals can be the best way to be introduced to a financial institution in many cases.