A financial institution that offers lending and savings services, and might also branch out into credit cards. Unlike credit unions, banks are businesses (often with responsibilities to shareholders) that exist to turn a profit. In general, they make money by lending the funds that consumers place in deposit accounts (e.g. checking accounts and savings accounts) to other consumers in the form of mortgages, auto loans, etc., for which they charge a higher rate of interest than they pay out on the original deposits.
Banks vary considerably in size and many no longer even have physical locations, operating strictly online. Money that is deposited into a bank account is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per accountholder per bank.
People are often unsure as to whether they should do business with a bank or a credit union, and there are indeed both advantages and disadvantages to either approach. The best way to go about making this decision, however, is to concentrate on two key factors: 1) The bottom line and 2) Convenience. More often than not, product terms will trump peripheral factors like customer service given that they have a far greater financial impact on you. As a result, we generally recommend comparing the products and services offered by all financial institutions in search of the best terms, rather than paring down your options prematurely. When you're looking for a checking account, you should also factor the location of in-network ATMs and bank branches into your decision, as those things could impact the fees you pay to deposit and access your money as well as your overall customer experience.
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