There are many benefits to putting your money into a bank or credit union.
What if you have cash or money in your peer-to-peer or cash app account? Should you move it to a bank or credit union? Let’s explore the reasons you might want to!
First, your money is safe in a bank or credit union, protected against theft, loss, fire or other natural disasters. This is due to the Federal Deposit Insurance Corporation (FDIC) standard deposit insurance (or National Credit Union Administration (NCUA) Share Insurance Fund for credit unions) which covers up to $250,000 per person, per bank, for each account ownership category. This also means the FDIC (or NCUA) will return the money to the customers if a bank closes and cannot give its customers their money. The locations you may keep or store your money in often still have risks.
Secondly, your funds are accessible 24 hours a day, seven days a week. Through an ATM (Automated Teller Machine), you can access your funds quickly when you need them. Using a financial institution-based debit card lets you avoid carrying around large sums of cash with the same access to your funds. Plus, in many cases, many financial institutions offer protection for lost or stolen debit cards. It is also more convenient to pay with a debit card than cash in many places.
Third, using a financial institution can save and earn you more money. It is usually cheaper to cash a check with a credit union or bank. You can set up automatic bill payments and direct deposit income in your account, which can make saving easier and faster. Many accounts may even be interest-bearing, which means as your money sits, you are earning. Even with small amounts, this can add up over time and provides more earnings than keeping your money in a peer-to-peer account or piggy bank.
Banks and credit unions also offer ways to keep track of your finances, making it easier to budget and plan. Withdrawals and income are automatically tracked, and you can often use other tools to see categories where you spend the most. With online banking systems, this information is handy from any mobile device. Financial professionals at the financial institution are also available to support you and answer questions along your financial journey.
Finally, building a relationship with any financial institution can help you in the future. Whether having a record of bills you have paid, saving money more easily for your goals, or getting a loan, having that history with the bank or credit union can help your financial future.
Michigan State University Extension has a variety of trainings, articles and educational contests to help with success in the world of money management. If you are interested in learning more about financial institutions, consider taking the self-guided course, Banking Basics. For information on the process of depositing funds, a mini course outlines the important steps.
MSU Extension and Michigan 4-H Youth Development help to prepare young people for successful futures. As a result of career exploration and workforce preparation activities, thousands of Michigan youth are better equipped to make important decisions about their professional future, ready to contribute to the workforce and able to take fiscal responsibility in their personal lives. For more information or resources on career exploration, workforce preparation, financial education or entrepreneurship, contact 4-HCareerPrep@msu.edu.
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