If you don’t use a bank, credit union, or thrift/savings and loan institution you are like nearly 10 percent of the American population.  There are a wide variety of reasons that people don’t use banks.  Perhaps you are a recent immigrant and are unsure about how banks work in the U.S.  Or maybe you aren’t fluent in English and you’re nervous about trying to communicate with a bank employee.  Maybe you don’t think your money is safe.  Perhaps you simply feel too intimidated to walk into a bank building, or have never had to do it because someone else in your family did it.  Maybe, like a lot of us, you are embarrassed not to know how to do financial things.  Well, don’t worry.  Everyone does things for the first time.  You can too.

Banks and financial institutions can help you manage your finances, save and invest money, protect your money and help it grow.   Even if you don’t currently use a bank, chances are you walk or drive past one in your neighborhood, on your way to work, or in areas you regularly visit.  You have probably seen advertisements for banks on TV, the internet and in newspapers and magazines.  So you may be familiar with the names of some banks, but perhaps you’re unsure about exactly a bank is. 

A bank is a place where you can deposit your money to keep it safe.  Depending on the type of bank you use, meaning if it has FDIC bank deposit insurance, it will guarantee the safety of your money (up to $250,000 per individual account).  The bank takes the money you “deposit” to make money for itself and, because it used your money, it will pay you a small amount of interest.

Banks are called financial institutions.  And banks are just one of a handful of financial institutions that people can use for financial services.  The three main types of financial institutions for banking are:

• Banks.  Banks are for-profit financial institutions (meaning they exist to make a profit, or money for themselves) and they are regulated by the federal and state laws.
• Credit Unions.  Credit unions are nonprofit financial institutions (meaning they do NOT exist to make a profit) and they are owned by the people who join the union, also known as members. 
• Thrifts/Savings & Loans.  Savings and loan associations and thrifts are similar to banks but were created to make home loans to individuals.

For our purposes we are going to use the term “bank” to refer to all three types of institutions that you can use to deposit money and engage in financial transactions.