Banks - First Draft Finding the right bank Steven Benner...

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First Draft Finding the right bank Steven Benner Davenport University
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Bank stability is a key aspect of searching for a bank; with that being said banks that are apart of the FDIC are a better choice. This is a question that people have been mulling over since the 19 th century. Back in the 1930's when the Great Depression hit, many banks failed and could not pay the monies that were given to them. After the Great Depression, the government stepped in and took charge. Congress created what is known as the FDIC. The Federal Deposit Insurance Corporations was created in 1933 in response to the thousands of bank failures that occurred in the 1920's and early 1930's. Created by the Glass-Stegall Act of 1933, it provides deposit insurance, which guarantees members deposits up to $250,000.00 per depositor per bank as of January 2012. This “Act” is very important when choosing the right bank. If a bank were to fail the people's money that was in the bank that failed would be backed by the United States Government. Banks are required to place signs at their place of business stating that “Deposits are backed by the full faith and credit of the United States Government.” This is something that everyone should notice first when choosing the right bank. Typically people tend to want their money insured in case anything were to happen to the depositor. Not every bank is apart of the FDIC and with over 10,000 bank that participate in the FDIC (Federal Deposit Insurance Corporations) it is a hard choice for the average American to make. Credit Unions are one of the type of banks that are not apart of the FDIC. Credit Unions are different than your typical bank. The main difference in a Credit Union is that members who have accounts in the credit union are the owners of the credit union and they elect their board of directors in a one-person-one-vote system regardless of the amount of money they have invested in the credit union. They big thing with credit unions are the feeling of being community- oriented which is a big motto for credit unions alike. The policies governing interest rates and other matters are set by the board of directors elected by and from the membership itself. Another big thing with credit unions as helping members improve their financial health. Legally and for tax purposes, credit unions are considered to be not-for-profit. This makes
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serving their members more of a priority than trying to maximize profits. They might be able to offer members more affordable loans, higher return on savings and lower fees. There are many reasons to join a bank. Some of these reasons people join banks are because they do not want to carry cash around with them anymore. Another reason is that they find it more secure having a bank account. A big reason is for people that have savings accounts. Typically savings accounts yield a return on the amount of money you invest. Every bank is different in the amount that you can earn in interest from the bank. As of today it looks like 1.05% is a one of the best interest rates
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