Millions of Americans use banks, a kind of financial institution.

Depending on where you live, you’ll probably have a number of banks to choose from. You’ll find that some are very large, and others are small. You’ll even find bank branches in some grocery stores and shopping malls. Banks are in big cities and small towns, and probably right in your own neighborhood.

Banks offer safe, secure, and convenient services that can help you save money and build toward a better financial future. Chances are, any successful person or business you can think of has a good working relationship with a bank.

The people who work at the bank are there to make you feel welcome. If you’re brand new to banking, they’ll be happy to explain what accounts and services can help you with your money management needs.

At the financial institution:

  • If you don’t know who to talk to, just ask.
  • Don’t sign anything you don’t understand.
  • Ask questions until you have the answers you need.
  • Ask for written information to take home and review.

Selecting the best for you

Not all financial institutions are called “banks.” Read each definition to learn more.

A bank is a financial institution governed by federal and state laws and regulations. Banks make loans, pay checks, accept deposits, and provide other financial services. Most banks are insured by the Federal Deposit Insurance Corporation (FDIC).

A credit union is a nonprofit financial institution owned by people who have something in common, for example, working in the same industry. You have to become a member of a credit union to keep your money there. Most credit unions are insured by the National Credit Union Administration (NCUA).

A savings bank or savings and loan association is similar to a bank. These companies were created to promote homeownership and must have a majority of their assets in housing-related loans. Although many banks also make home loans, a savings institution’s main business is to make home loans. Savings banks are usually insured by the FDIC.

why use a financial institution

Benefits of using a financial institution

Safety: It’s risky to keep your money in cash. It could easily get lost, stolen, or even destroyed in an unexpected event such as a house fire. By keeping your money in a financial institution, you’ll have the peace of mind knowing your funds are safe.

Convenience: By using financial institution, you don’t have to carry large amounts of cash, but you can conveniently get cash when you want it at bank branches, ATMs, grocery stores, and many other convenient locations — even when you travel away from home.

Saves money: Many people who don’t have a bank account use check cashing stores instead. Most of these stores charge very high fees. You can usually save a lot by using a bank account with no fees.

Security: Are you worried that a bank might mismanage your money, or even go out of business? All U.S. banks have to follow federal and state laws and regulations. And at most banks, your funds are insured by the Federal Deposit Insurance Corporation, or FDIC. At most credit unions, your funds are insured by the National Credit Union Administration or NCUA. That means that if anything ever happened to the bank, your money up to $250,000 is insured or protected.

Financial future: By working with a financial institution, you’ll have financial professionals you can talk to and work with. The knowledgeable advice of these professionals can be valuable resource to help you and your family to build a better financial future.

gray shield with money symbol

about fdic insurance

The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring deposits in financial institutions; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a financial institution fails.

The FDIC insures deposits in most financial institutions in the United States. The FDIC protects depositors against the loss of their deposits if a FDIC-insured financial institution fails. FDIC insurance is backed by the full faith and credit of the United States government.

Basic FDIC insurance is $250,000 per depositor per insured financial institution. It is possible to have more than $250,000 insured by the FDIC on deposit at any one financial institution. The FDIC separately insures deposits held in different categories of legal ownership including: Individual Accounts, Joint Accounts, Revocable Trust Accounts (including Payable-on-Death [POD] accounts), and certain Retirement Accounts (such as IRAs).

The FDIC insures deposits only. It does not insure securities, mutual funds, U. S Treasury bills, bonds, notes or similar types of investments purchased through an insured financial institution.

Here is a summary of what funds are — and are not — FDIC-Insured:

• Checking Accounts (including money market deposit accounts).
• Savings Accounts (including passbook accounts).
• NOW Accounts.
• Time Deposit Accounts (Certificate of Deposits).
• Certain Retirement Accounts (including IRAs).
• Investments in mutual funds (stock, bond or money market mutual funds).
• Annuities (underwritten by insurance companies).
• Stocks, bonds, Treasury securities or other investment products, whether purchased through a bank or a broker/dealer.
• Contents of safe deposit boxes.
• Losses from robberies and other thefts.
For further information, visit the FDIC website.

ABOUT National Credit Union Share Insurance Fund

Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions. 

Federally insured credit unions offer a safe place for you to save your money, with deposits insured up to at least $250,000 per individual depositor. The National Credit Union Administration (NCUA) is the independent agency that administers the National Credit Union Share Insurance Fund (NCUSIF). NCUSIF is a government-backed insurance fund for credit union deposits. Like the FDIC’s Deposit Insurance Fund, the NCUSIF is a federal insurance fund backed by the full faith and credit of the United States government and covers up to $250,000 per account holder per institution.

To learn more about credit unions, visit https://www.mycreditunion.gov/