Why do I need a bank or credit union account?

For several reasons, it usually makes sense to have an account at a bank or credit union.

Your money is protected

When you keep your money in a bank or credit union, you do not have to carry cash with you or keep money at home. Choosing a bank that is insured by the Federal Deposit Insurance Corporation (FDIC) means that the money is protected by the federal government if the bank fails or goes out of business. If that happens, your money is insured up to $250,000 per individual account holder. The same protection applies to accounts at a credit union insured through the National Credit Union Administration (NCUA).

You can quickly withdraw money

With a bank or credit union account, you have around-the-clock access to withdraw money from ATMs (automated teller machines). You can usually use ATMs at your own bank or credit union at no cost. You can also withdraw your money at other ATMs, including ATMs in other countries, for a fee.

You have access to free services

With most bank or credit union accounts, you can cash checks, get a debit card, or have direct deposit without paying fees. Before you open an account, make sure that the services you need are available without service or maintenance fees.

Your employer can deposit your pay quickly

Many employers encourage you to choose direct deposit for your paychecks, where the employer sends your money directly into your bank or credit union account. This saves the employer the hassle of printing a paper check. (You could also have other ways to receive your pay, such as on a prepaid card.) Receiving a printed check means you need to take it to a bank or check cashing service to get the money, and usually there is a fee to cash the check.

You start your banking history

When you have an established history with a bank or credit union, it can be easier to get a loan for big purchases like a car or a home. When you apply for a mortgage loan, lenders might not approve your application if you do not have a checking or savings account because they cannot verify where your down payment is coming from. What’s more, a good banking history can mean you do not have to put down a large deposit for rental housing, utilities, or a mobile phone.

Ready to get started? Use this checklist to open a new account.

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