Inside Your Account

This is Robert. Even though he is only two-dimensional, that's not going to stop him from opening his own checking account today. He's heading off to the bank with $300 to deposit. Before he goes out the door, he remembers that he needs to bring some documents with him as well.

If the bank that Robert is heading towards is like most banks in America, he's going to need a picture ID and some other form of identification, as well as, his Social Security number. It's good that the bank requires all of this information—if they didn't, it would be easy for someone to commit fraud and impersonate Robert at the bank.

Robert should also call the bank and see if $300 is enough to open a new checking account. All banks are different in this respect, and minimums can range from $0 to $500 or more. Now that he's done his homework, Robert is ready to open his checking account, or is he?

Bank Account Types

Opening a bank account involves making some smart decisions about the type of accounts you need and the number of accounts that you wish to keep in good standing. We've just learned about all the fees involved. Having a checking account, savings account, or certificate of deposit can help you safely store money and even earn interest on your savings throughout the year. You'll need to understand some basic banking terms and examine your financial situation as you explore different bank account options. Watch this presentation to learn more about the types of accounts available.

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Compound and Simple Interest

When you put money in some types of accounts like savings or certificate of deposit accounts, you earn interest. What does that mean? It means that the bank pays you money if you keep your money with them. How does the bank calculate this interest? Pay close attention as we discuss compound versus simple interest: it can mean the difference of big money to you.

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How Would You Save?

If you received $10,000 to save, what account(s) would you select to place your money? Would you keep it all in one account or split it up? Why? Using the course discussions area, post and explain your answers. Return to the topic several times over the next few days to read your coursemates’ posts. Reply to at least two of them, being sure to ask questions, and encourage further conversation.