Bank Accounts

Establishing a personal bank account for yourself is an important step to managing your finances and transitioning to independent living. You will want to try and set up a bank account before you leave foster care or soon after aging out.

Choosing a bank
You have a choice to bank with any bank you can find. Around Seattle are Wells Fargo, Bank of America, Washington Mutual, U.S. Bank, Key Bank and smaller companies such as Banner Bank. Visit their websites or stop into a branch and pick up some brochures to read what services they offer and what the costs are. Ask around and see what banks other people you know use and if they like them. See what banks have branch locations close to where you live or work.

Checking and savings accounts
These two accounts often go together when you set up an account. A checking account is where you will be paying your bills from. Any time you write a check or make a purchase with your debit card, the money comes directly out of this account. If you write a check for more money than you have in this account, the check will "bounce" and you will be charged a fee from the bank, as well as a potential fee from the person you made the check out to for not being paid.

A savings account allows you to safely keep money without having to keep it around you at home. Savings accounts earn interest so if you keep $100 in it for a month and the account has a 3% interest rate, you will earn an extra $3 at the end of the month for keeping your money there.

Savings plans
Banks offer a variety of savings plans to hold your money in so they can make even more interest than a savings account. Here are some examples:

Certificates of Deposit - These are issued by banks for a set amount of time -typically three months to five years. The bank holds onto your money for the amount of time you agree to and the money makes interest while deposited with the bank.

Money Market Funds - There are short-term investments in business or government debts. They are not federally insured but historically have been safe and gain higher interest than Certificates of Deposits.

Securities or Bonds - There are federal government notes with guaranteed interest payments. Your original investment is always safely returned to you after the agreed time ends.

Mutual Funds - Mutual funds are run by professional investors who are paid to ensure your fund makes money. Instead of investing directly in stocks, bonds or real estate, mutual funds include a variety of investments.

 

 

 

1.Why should I think about a savings plan?

2. Why invest now?

 

 

 

 

Balance your check book

When you get a checking account, it's easy to lose track of receipts from the purchases you've made and also writing checks without balancing the books. Don't go more than a few days without taking a look at your expenses. If you accidentally bounce a check, some banks will charge you up to $30 per overdrawn check.