If you’re like most people, you probably only use banks for a few things, like cashing out your paycheck, withdrawing money, and mobile banking. But it offers a lot of services, some of which you may not even be aware of.
Get the most out of your bank by reviewing the standard services most provide.
Common Types of Bank Service Offerings
While different banks offer different things, most banks provide the following services.
1. Bank Account
A bank account is a place where you can deposit your money. Types of bank accounts include:
- Checking account. A checking account allows you to manage your daily finances. You add funds to it by depositing checks and cash or setting up direct deposit for your paycheck. You cash out by writing a check, withdrawing cash at a bank branch or ATM, or using a connected debit card.
- Saving account. A savings account is a place to park your money for emergencies or short-term savings goals such as a vacation or buying a car. Savings accounts earn interest, but much less than other investments such as stocks and bonds. Savings instruments are better for long-term goals such as retirement.
- Money market account. A money market account is a savings account that earns a higher interest rate than a traditional savings account. Money market accounts often require a sizable initial deposit and limit how many withdrawals you can make each month.
- Certificate of Deposit (CD). Certificates of deposit are another type of savings account. CDs usually offer greater returns than money market accounts, and are a safer investment than stocks because they have a fixed rate of return. However, you will not be able to access your money until the CD’s expiration date.
- Business Account. Business accounts such as checking and business savings allow small business owners, freelancers, and fraudsters to keep their business and personal funds separate. It makes accounting and tax preparation easier and protects your personal money from business-related liabilities.
2. Credit Card
Most national banks, such as Capital One and Wells Fargo, offer credit cards. Many regional and local banks also do this.
Credit cards have limits on how much you can charge, and you are charged interest if you don’t pay your balance in full each month. Some have an annual fee; some get rewards such as cash back or travel allowances; and some offer 0% APR balance transfers. Read the terms and conditions carefully before you apply for a card.
ATMs allow you to deposit funds, withdraw cash, and check your account balance without encountering a bank teller during business hours. You can use an ATM at a bank where you don’t have an account, but you will likely be charged a fee.
4. Digital Banking
Bank websites and apps allow you to make basic banking transactions from anywhere at any time of day. These transactions include mobile check deposits, transfers between accounts, monitoring accounting activity, and online bill payments.
5. Check Cashier
A cashier’s check is a check issued by your bank. The money comes from your bank account, but because the issuer is a bank, the check is guaranteed. Cashier’s checks are often required for large purchases such as a down payment on a house because the recipient knows they won’t bounce.
6. Money order
A money order is also a guaranteed form of payment. You pay the amount in cash plus a fee the bank charges. Because you made the prepayment, the recipient knows the money order won’t bounce.
While most banks require you to have an account to get cashier’s checks, you don’t need one for money orders. However, the most you can usually get on a money order is $1,000. This restriction is intended to deter and prevent fraud because once a money order is sent, it is difficult to cancel. Cashier’s checks can be any amount if you have the money in your account to cover them.
7. Travel Checks
Travelers checks are a way to access money when you are in another country. You buy a check at your bank, sign it when you buy it, and only you can authorize the check to cash it. That makes it safer than carrying large amounts of cash with you when you travel.
8. Wire Transfers
Wire transfers allow you to send money directly from your account to another account without withdrawing cash or writing checks. It’s a great way to send money quickly and securely, especially internationally.
Banks lend money to borrowers for various purposes. . The bank adds an interest fee to each monthly payment, which borrowers make until they pay off the balance.
Some banks only lend to existing customers, while others lend to anyone who meets their requirements. That said, you can often get better loan terms if you already have an account with a bank.
Common types of loans are:
- Mortgage. A mortgage is a loan to buy real estate. You make payments on that amount over a certain period of time. The property you buy serves as collateral, which means the bank can foreclose on it if you can’t pay off the loan.
- Home Equity Loans. Home equity loans allow you to borrow with the money you’ve already paid off your mortgage. You can use it to pay for home renovations and repairs, consolidate debt, or fund other expenses.
- Auto Loans. A car loan from a bank may be more affordable than car financing through a dealer for some borrowers.
- Personal loans. Unlike the loans above, you can use a personal loan for almost anything you want – debt consolidation, medical expenses, weddings, you name it. The exceptions are tuition fees, down payment on housing, and business expenses.
- Business Loans. You can use a business loan for any business-related expenses, from hiring employees to purchasing inventory and equipment. You cannot use a business loan for personal reasons.
9. Notary services
Most bank branches have staff who can certify legal documents for you. They provide this service free of charge to their existing customers. If you are not a customer, many will still certify the document, but they may charge you a fee.
10. Safe Storage Box
A safe deposit box is a safe place to store valuables, from personal notes to jewelry. Only the owner of the box can access it. Banks typically charge anywhere from $20 to $200 per year for a safe, depending on the size.
11. Foreign Currency Exchange
Exchanging currency overseas, such as at an airport kiosk, can be expensive. Avoid high fees by converting your money at your bank before you travel. Some banks will even do it for free.
But don’t count on it.
There’s a lot more to your bank than you may realize. It’s a one-stop shop for many aspects of your financial life. Sometimes, they even offer great promotions like free ice cream bikes or breakfast biscuits.