subject: Personal Banking Services Overview [print this page] Personal banking, which is sometimes referred to as retail banking, is when a bank does business directly with individuals, rather than with organizations such as corporations and other banks. Many banks that offer personal banking also perform services for other types of banks as well. In Minnesota as elsewhere, there are many personal banking services that you can take advantage of.
The most basic function of a personal bank, of course, is the use of a checking account. A checking account allows you to store your money in the bank rather than to have to keep cash on hand at all times. The most obvious benefit of this is the fact that your money is kept secure. Large sums of money kept at home are vulnerable to theft, while if the funds are stored in the bank they are insured by the Federal Government even if the bank goes out of business for as much as 250,000 dollars. This means that your money is very secure in a Minnesota personal checking account.
A Minnesota personal checking account also allows you to make payments over the phone and perform other transactions that cannot be performed with the use of cash. Very few employees can receive payment without the use of a checking account, and checking accounts are necessary to sign up for a great deal of services as well.
Savings accounts are a less commonly used service offered by banks, but those who can take advantage of them can reap the rewards. A savings account allows you to store money for use in the future. The primary benefit of a savings account is the fact that it earns you interest. This means that the money that is stored in a savings account is continually growing in size. For this reason, it is a good idea to have this type of account. Any excess money that is not being used should be placed in a savings account.
If the growth rate on a savings account is not large enough for you, you may be interested in a certificate of deposit. This is when you place a deposit into the bank that cannot be accessed for a specific period of time. During this time, the bank earns interest. The interest rate on a certificate of deposit is often much higher than the interest rate that is earned by a savings account. The downside of this is that it is not possible to access the funds before the term ends without incurring a penalty. The penalty is incurred on the interest, not the principle, however.
Another feature offered by personal banking is the option of a personal loan. A personal loan in Minnesota can be used to purchase something that you do not have enough cash on hand to pay for in the short term. You can use the loan to make the purchase, and pay it back to the bank, plus interest.
Alternatively, you can apply for a credit card. While a credit card typically has a higher interest rate than a personal loan, it is also much more convenient to obtain and use on a regular basis. Whether taking out a personal loan in Minnesota or a credit card, it is important to understand what the monthly payments will be when you take on debt so that it does not become an issue.
