Tips & Topics - Banking
Introduction to Bank Services
Did You Know?
You don’t have to be a U.S. citizen to open a banking account in the United States. The USA Patriot Act requires all banks to establish a written Consumer Identification Program (CIP). Under the CIP, a bank may accept Consular or Cedular Cards as a valid form of identification. Want to learn more about identification requirements at New York banks? Please click here.
If you bought something for $100 in 1998, that same product would cost you $132.27 in 2008. Saving money in an interest-bearing account helps you build up wealth and beat inflation. Curious what $100 would have bought 20, 30 or even 40 years ago? Go here to use the interactive tool "What is a dollar worth?"
Regulated financial institutions like banks, thrifts and credit unions offer a place to deposit money where your savings may be insured by the federal government. By placing your money in an interest bearing checking or savings account, you also benefit from compound interest where money you put in a savings account earns interest. As time goes by, you earn interest on both the money you originally put in, plus on the interest you’ve accumulated, so your money grows faster over time.
The Federal Reserve Board provides resources to help consumers navigate the complex world of banking.
The U.S. Department of Labor provides information on compound interest, along with other steps you should take to achieve financial fitness, in a consumer brochure Savings Fitness: A Guide to Your Money and Financial Future.
Banks and Credit Unions offer a variety of different products or services. Here’s a summary of just some of the accounts offered at these institutions:
- Checking accounts, which are offered at banks, and share draft accounts, which are offered at credit unions, are insured by the federal government in the event the bank fails. Deposits are also protected from loss or theft, which they would not be if you kept the money someplace else.
- A checking or share draft account can help improve your credit record. Having an account establishes a relationship with a financial institution, and this in turn facilitates the process if you ever need to apply for a credit card or loan.
- You can use a checking or share draft account to cash your paychecks and pay bills. This can actually be less expensive than using check cashers or money orders, since many financial institutions offer free checking. Bank statements allow you to keep track of where your money is going.
There are other types of financial institutions that operate under different regulatory structures, are subject to different requirements, and offer different products and services. The Federal Reserve provides answers to frequently asked questions related to banks and similar institutions.
In 1999, legislation was enacted authorizing the creation of Banking Development Districts (BDD) . The purpose of the program was to encourage the establishment of commercial bank branches in geographic locations where there is a demonstrated need for banking services. The legislation authorized the State Comptroller to deposit public funds with banks located in designated Banking Development Districts, as determined by the New York State Banking Department. The Banking Department also has a BDD fact sheet that provides more information about this important program.