Saving your money, as best as you can, is an important step to your family’s well being and your ability to some day retire. There are many different types of bank accounts to choose from, whether it is a checking account, a savings account, an individual retirement account or so on. These accounts can be confusing by themselves, let alone trying to figure out which financial institution you should use. That is why I am here to discuss the three major types of financial institutions with you, and the pros and cons of each one.
The first major type of financial institution is the commercial bank. These are typically the bigger banks found across the nation, such as Bank Of America, JP Morgan Chase Bank, and Wells Fargo to name a few. These banks are great in the sense that they are strategically located throughout the United States, and most have affiliates in other countries as well. They also tend to offer the freebie accounts or the accounts that require a small deposit to open. Almost anyone can get an account at one of these banks, as long as they are not currently involved with some issue or dispute with another bank. These banks also usually offer the latest operating hours and almost all include Saturday hours which make them more convenient to the working class. The downside to these types of financial institutions is that they generally offer a lower interest rate on their savings tools.
The second major type of financial institution is the credit union. These institutions are used by their members only. Typically you must be a part of a certain labor force to join a specific credit union. For example school teachers usually have their own credit union they can choose to belong too just because they are teachers in a certain town or state. Many of these credit unions are now opening their membership to people outside that specific job force. Although you may be required to be related to a current member. These credit unions are great in the sense that they usually offer their members certain perks that they couldn’t get else where, such as lower financing for their automobiles. Credit Unions tend to pay their members a slightly higher interest rate for their savings accounts then commercial banks.
The third, and final, major type of financial institution is the savings and loans. Despite the downfall in the 1980s, most savings and loans that are in business today are thriving well. These types of financial institutions usually do not offer a lower deposit on opening an account, and they usually require a higher minimum balance then most commercial bank. However, savings and loans tend to offer higher interest rates on their different savings accounts, and you tend to get better customer service.
So, there you have the three major types of financial institutions. Hopefully you now have a better understanding of the different types of institutions and they many different things they have to offer. Of course with the current financial situation of the world, it would be wisely recommended to research any bank, credit union, or savings and loan before opening your new account.
