MoneyMakingEasier

There are many different answers to this. So first I will tell you how to make a bank account which may answer your question.

How to open a bank account

1. Choose a bank or credit union that is reliable and trustworthy. One that typically has never had many problems.
2. Get the required documents such as driver’s license, tax identification number and social security number (there are a lot more. These are just the basics).
3. Apply for it online and complete the application form.
4. Verify your identity
5. Fund the account with money. Only do the minimum.
6. Receive your account details and be sure to keep track of them. You never know when you might need them again.

Questions on how bank accounts work

• What happens after you deposit money?

If you put in $200 for example the bank’s records would record your claim to the $200. The bank uses your money for other things but don’t worry. They still would owe you $200 and would have to give it to you any time you asked.

• What happens when you spend money from your bank account?

The only way you could spend money from your bank account is through your credit card. The bank would reduce your account balance (take away money from your account) and then send that money to the person/company you’re paying.

• What is the difference between a checking account and a savings account?

Checking is for your everyday spendings, bill payments and purchases. Savings is for storing money which eventually increases over time (earning interest).

• How do banks make money from my account?

Banks will lend out your money to borrowers and charge interest on the loans. Don’t worry because they still would give you your money back if you ever needed it.

• Can I lose money in my bank account?

Yes, you could from spending, fraud and fees. However, most people don’t lose money (unless it’s spending) because most banks today are very safe.

• What is interest?

Interest happens when you take a loan from a bank. It’s true that some don’t take interest, but most do. Interest is when you slowly owe money to the bank. You would owe more if you loaned for a long time. For example, if you loaned $1,000 at a 4% interest rate, in a year you would owe the bank $40.