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Banking System in Usa

Autor:   •  March 11, 2016  •  Essay  •  467 Words (2 Pages)  •  1,763 Views

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Overview

 In the United States, the banking system is an important part of our economy and lives.  A bank account helps keep money secure and gives you the ability to access it easily and safely.  It also allows users to shop online, where you may be able to find a better deal or a bigger selection.  The Federal Deposit Insurance Corporation (FDIC) guarantees individual deposits of up to $250,000 per account and is backed by the “full Faith and Credit” of the US Government.

Benefits and Drawbacks

  • Keeps money secure from theft and disasters such as fire
  • Guaranteed by the FDIC
  • Deposits could accrue daily interest
  • Access to a debit card which allows for online shopping and payments
  • Cheap or free services such as check cashing
  • Easier to apply for credit
  • Accounts can be subject to fees if not used properly (examples below)
  • Checks may have a hold on the funds upon deposit until it can be verified

Major Fees to be aware of:

Overdraft fees – When you withdraw more money than is in your account

Minimum balance fees – When the balance of the account falls below a certain minimum

ATM fees – When using an ATM that is outside of your bank’s network

Monthly Service Fees – Charged for access to the bank’s services (can usually be waived)

Credit Unions

Credit Unions are a good choice for many consumers.  These institutions are owned by their members, are non-profit, and provide a majority of the services that regular banks do.  They generally offer lower interest rates on loans and higher interest rates on deposits.  Further, they do not charge many of the fees that regular banks may charge.  However, there are a few drawbacks.  They tend to lack the new technology (mobile banking, etc.) that bigger banks offer and they frequently have fewer ATMs, though some will refund ATM fees charged by out-of-network ATMs.  Lastly, it is limited in its membership, however almost everyone should qualify for at least one credit union.

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