A financial institution, such as a bank, thrift, or credit union, is a business that offers you a safe place to keep your money and uses it to make more money. Financial institutions offer different services for keeping your at their business.
Reasons Why You Should Keep Your Money in a Financial Institution
Safety: Money is safe from theft, loss, and fires.
Convenience: You can get money quickly and easily.
Cost: Using a financial institution is usually less expensive than using other business, such as check cashing business, to cash your check. Also, a check account allows you to write checks rather than pay for money orders.
Security: Most financial institution are insured. This means that if for some reason the financial institutions closes and cannot give its customers their money, the insuring organization, like the federal Deposit Insurance Corporation (FDIC), will return the money to the customer. The FDIC will only insure deposit up to $100,000 per account.
Financial Future: Building a relation with a financial institution will allow you to write checks so that you can demonstrate a record of paying bills, save money, and get a loan or mortgage. (However, you may be able to obtain a mortgage without having established a banking relationship, but you must keep accurate records and receipts of paying your rent and other bills.) In addition, having a bank account will help you establish and manage good credit. For example, if you opt to receive overdraft protection on your account- a feature that automatically advances funds into your account to cover items that would cause a check to bounce- you’ll receive a positive tradeline for your credit report. As part of credit report terminology, a tradeline is any credit account you might have, such as a loan, credit card, or mortgage.
