Before you head to a bank, it’s important to be well-versed in the basics of banking. Here’s a list of some core ideas you should be familiar with.
Current Accounts
An account in a bank or any other financial institution allows withdrawal and deposits. Having an account is great for paying bills and keeping track of expenses.
Savings Accounts
A deposit account at a bank or other financial institution protects funds and pays a modest interest rate. It is excellent for building emergency savings or saving for a short or medium-term goal.
Certificates of Deposit
Savings accounts that offer a higher interest rate for committing your money for a set period (six months, twelve months, etc.)
Mortgages
A loan you can use to purchase a home, wherein the collateral is the home itself.
Auto Loans
Auto loans are used to finance the purchase of a car. Usually, it is unsecured and based on the borrower’s integrity and ability to repay. In this loan, the collateral is the vehicle itself.
Personal Loans
Unsecured loans offered to bank customers.
Credit Cards
Credit card debt is a type of unsecured, revolving loan mainly used for making purchases, but some cards also offer cash advances. The credit card issuer restricts how much can be changed to the card, and borrowers make monthly payments on the amount charged to the account and on the interest the issuer charges. Repaid debts might then be used as collateral for new loans.
Debit Cards
Cards linked to a checking or savings account that can be used to make in-store or online purchases directly deducted from the account balance or withdrawn from an ATM (automated teller machine).
ATM Cards
Cards linked to a checking or savings account that can be used at ATMs to deposit and withdraw cash but not make purchases.
Wire Transfers
A method of transferring money from one person to another. It is often used to send money internationally.
