A bank is a financial institution that accepts deposits and makes loans. It is different from money markets and hedge funds, which are not banks. In the United States, banks are regulated by state and federal authorities, and protections like the Federal Deposit Insurance Corporation safeguard your savings. Choosing a bank depends on factors like fees, convenience and range of services. Having healthy credit is an important part of banking, and Experian lets you check your free credit report and score.
Banks protect your cash from theft and natural disasters, such as fires or floods. They also pay interest on the money that you save with them, making it a convenient place to put your funds until you are ready to use them. Banks can also make it easy to manage your money by offering checking and savings accounts, debit cards, auto loans and mortgages.
The way that banks earn money is through interest on the capital they lend out and transaction fees. These include fees for services such as checking accounts and financial advice. They can also earn profits by speculating on the value of assets such as debt securities and stock market investments.
There are many types of banks, including retail banks for everyday consumer needs and commercial banks for business purposes. In addition, there are online-only banks and credit unions. When choosing a bank, consider factors such as the range of services that it offers and its customer service. You can also find out if it has a high Bauer Financial rating, which takes multiple factors into account.