Banks Go By Many Different Names

This section covers the different financial institutions available to you as a consumer, and the various banking services and products they offer. Although many people call the four general types of financial institutions that we will discuss "banks," there are some important differences among them.

1.   Commercial Bank: Financial institution that offers a wide variety of banking services, including lending.
              a. Savings are federally insured by the FDIC (Federal                   Deposit Insurance Corporation) for coverage up to                   $100,000 per depositor.

2.   Credit Union: Not-for-profit financial institution owned by its members.
              a. Savings are federally insured by the NCUA (National                   Credit Union Association) for coverage up to $100,000                   per depositor.

3.   Savings and Loan: Bank that specializes in savings accounts and mortgage loans.

4.   Internet Bank: Electronic bank that does not have a physical (brick-and-mortar) location. Because Internet banks don't have many of the costs associated with running physical locations, they can often offer better terms on such things as interest rates and loans.

We designed this section to explain the various types of products and services these financial institutions offer. A little research will help you determine those best suited to meet your needs. As you make your choices consider interest rates, fees, and services offered, as well as location convenience and benefits, such as account insurance. Also, keep in mind that although not all of the above are "Internet Banks," most do offer the convenience of online banking services.

"Did You Know?"
No insured savings has ever been lost by a depositor with a federally insured financial institution.

What You Need to Know About Account Insurance:

• Certain retirement accounts, such as Individual Retirement Accounts (IRAs), are federally insured up to $250,000 per depositor per insured financial institution
• No insured savings has ever been lost by a depositor with a federally insured financial institution
• As a depositor with an insured financial institution, you do not pay directly for your account insurance protection
• If a federally insured financial institution does fail, the federal insurers will make any necessary payouts to the depositor