Basic Services Typically Offered by Banks in the us

Most U.S. banks offer a similar array of services to their customers. The vast majority of a bank’s profit is made from loaning money to borrowers for mortgages, home equity loans, and credit cards. However, they will help you manage your day-to-day financial situation for little-to-no charge with checking accounts and savings accounts. Here’s a summary of the services offered by most banks.

CHECKING ACCOUNTS. Checking accounts are used to manage your day-to-day spending. You will be issued a check book and most likely an ATM card. This will allow you to write checks or withdraw money against the balance in the account. Most checking accounts don’t earn any interest on the balance.

SAVINGS ACCOUNTS. Saving accounts are used to store money that you don’t readily need. To withdraw from your savings account, you usually need to transfer money from your savings account to your checking account. Savings accounts offer interest on the money in the account, but it is typically a nominal rate. However, some financial institutions, such as ING Direct, offer higher interest rates on their savings accounts.

CREDIT CARDS. Credit cards are used as a way to “borrow” money from the bank. The bank gives you one month to pay the money back or you will begin paying interest on the amount of money owed. Interest rates are usually very high with credit cards. It’s not advisable to run up a high credit card bill, and it can affect your credit score when trying to secure a loan for a large purchase such as a home or car.

MORTGAGES. Mortgages are large loans made to a borrower to purchase a home. Mortgages are usually paid off over 30 or 15 years. The interest rates that banks charge for mortgages fluctuates with the interest rate set by the Federal Reserve Bank.

HOME EQUITY LOANS. Home equity loans are loans borrowed against amount of money you have paid off in your home and/or the amount of money your home has increased in value since you bought it. Many people take out home equity loans to make improvements to their house or make a large purchase. Interest rates on home equity loans are typically higher than the interest rate on mortgages, but lower the credit card interest rates.

INVESTMENT MANAGEMENT. Most banks offer services to help you manage your investments, such as retirement, personal, college funds, trusts, etc.

Banks usually offer other services such as issuing money orders or cashiers checks, storing value items in safe deposit boxes, and breaking larger bills into smaller amounts or cashing in change for bills.