Banking Basics

Look here first before setting up a bank account or making changes to an existing account.

Choose a Bank Account

A bank account provides a safe place to put your money; can be less costly, over the long term, than using a check casher or other non-bank service; and can help you save money. When it comes to choosing an account, there are many options, such as:   

  • Savings - This is a deposit account that earns interest known as an annual percentage rate or APR.  
  • Checking - These accounts allow you to deposit money, withdraw money, and write checks to pay for purchases and bills. Most banks will also provide a debit or ATM card and a checkbook to allow you to withdraw cash and make deposits at your bank's ATM machines.
  • Certificate of deposit (CD) - This is a deposit-only account that offers a guaranteed interest rate for a specified term usually ranging from 6 months to 5 years--if you promise not to touch the money for the agreed upon term. Most banks charge a penalty for early withdrawal. 
  • Money market - These are deposit accounts that pay interest. Money market accounts provide a higher interest rate than traditional savings accounts and usually come with high minimum balance requirements.

Each has different rules and benefits that fit different needs. The bank or credit union must provide you with the account terms and conditions when you open your account.

Important Things to Consider

When choosing an account that is right for you, think about these factors:

  • Minimum deposit requirements - Do you have to keep a minimum dollar amount in your account to earn interest or avoid account maintenance fees?
  • Limits on withdrawals - Can you take money out whenever you want? Are there any penalties for doing so?
  • Interest - Can you earn interest on your accounts? How frequently is it paid (monthly, quarterly)? Check with banks or credit unions to compare their current published rates.
  • Online bill pay - Can you pay your bills directly from your bank or credit union’s website?
  • Deposit insurance - Make sure that the bank is a member of the Federal Deposit Insurance Corporation (FDIC) or that a credit union is insured by the National Credit Union Share Insurance Fund (NCUSIF).
  • Mobile banking - Can you access your accounts and make deposits from your mobile phone or tablet? Does the bank charge fees for this access?
  • Convenience - Are there branches or ATMs close to where you work and live? Can you bank by phone or Internet?

If you are considering a checking account or another type of account with check-writing privileges, add these items to your list of things to think about:

  • Number of checks - Is there a maximum number of checks you can write per month without incurring a charge?
  • Check fees - Is there a monthly fee for the account or a charge for each check you write?
  • Holds on checks - Is there a waiting period for checks to clear before you can withdraw money from your account?
  • Debit card fees - Are there fees for using your debit card?
  • Account fees - Does the bank charge fees on your checking or savings accounts to cover things like maintenance, withdrawals, or minimum balance rules? 

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Bank and Credit Product Complaints

If you have a problem with your bank, financial institution, lender, broker, or any other financial service provider, you should report it. To guide you through the process of filing these types of complaints, the Federal Reserve offers consumer help and the following tips:

  • First, try to resolve it with the manager at the branch location, the customer service hotline, or the institution's website.
  • When filing your complaint, clearly explain your problem and how you would like it to be resolved. Use this sample complaint letter for tips on what information to include in your complaint.
  • Be sure to have copies of receipts, checks, or other proof of the transaction.

If you don't get your problem resolved using these steps, you have the right to get help from the correct regulatory agency.

Complaints About Deposit Accounts

Financial institutions are regulated by different government agencies, depending on how the institution was chartered.

Use the Federal Reserve System's financial institution search tool to find out which agency accepts complaints about the financial institution you need to file a complaint against. The Federal Deposit Insurance Corporation offers the contact information for the primary federal agencies that regulate financial institutions.

Complaints About Other Financial Services

Maybe your problem doesn't involve a traditional bank or credit union or isn't related to bank accounts or fees, but is related to credit or other financial services. The Consumer Financial Protection Bureau aceepts complaints involving loan products, such as mortgage companies, car loans and leases, student loans, payday loans, and any other consumer loans. This agency also accepts complaints about other financial services, such as credit cards, prepaid cards, money transfers, and debt collection. 

If you need to file a complaint about an investment, such as a fraud, pyramid scheme, or other violation of federal securities laws, submit your problem to the Securities and Exchange Commission. You may also submit a complaint with your state's securities regulator.

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Stop Payments on Credit Cards and Checks

While many merchants offer easy refunds or exchanges, sometimes you may need to stop or withhold a payment. Here are some important things to consider when you want to stop a credit card, debit card, check, or pre-arranged payment:

Withholding a Payment on a Credit Card Purchase

The Fair Credit Billing Act (FCBA) includes legal protections for problems with the quality of goods or services purchased with a credit card. You may withhold payment for defective goods or services while your credit card company investigates the matter, under these conditions:

  • The purchase totals $50 or more. 
  • The merchant is in your home state or within 100 miles of your home. 
  • You have made a good-faith effort to resolve the problem with the merchant.

You may also withhold payment for defective goods or services in other circumstances, such as if the merchant is also your card issuer, regardless of the cost or geographic location.

However, you are still responsible for covering any other charges on your account that are not related to the disputed amount, and for promptly notifying the card issuer of the problem. If you cannot correct the problem with your card issuer, you can contact the financial institution’s state or federal regulator for help. To find out who regulates a financial institution, contact the Federal Deposit Insurance Corporation (FDIC).

Stopping a Debit Card Payment

A debit card deducts payments electronically from a checking or savings account. Unlike credit cards, debit cards are not covered under federal legal protections for damaged goods or faulty service. However, your bank or the merchant may still offer help.

Contact your financial institution to find out if there is time to stop the deduction of the funds from your account or if anything else can be done. But given the speed of debit card transactions, you will likely have to resolve the matter with the merchant or pursue other legal remedies.

Stopping a Check

Banks offer, typically for a fee, the ability to stop payment on a check you have written. But your bank must receive and process your request before the funds have been removed from your account.Once a check has been paid, it’s up to you to try to get your money back from the merchant or person who cashed the check.

Before you submit a stop payment request, check your transaction history and call your bank’s customer service department to find out if that check is pending, but just not included in your online statement. If you orally request a stop payment, make sure to follow up in writing. Under the law in most states, an oral request to stop payment on a check expires after 14 days, but a written request is valid for up to 6 months. 

Stopping an Automatic, Recurring Payment

If you have regular, automatic deductions from your checking account (to cover expenses such as insurance premiums or utility bills), the Electronic Fund Transfer Act (EFTA) allows you to stop those payments.

  • You should first notify the vendor.
  • Then inform your bank about your request at least 3 business days before the money is scheduled to be transferred. Your notice to the bank may be oral, but the institution may require you to provide a written follow-up within 14 days to ensure that no additional payments are made. If you do not provide a written follow-up, the bank is no longer responsible for stopping future payments.

Stopping an automatic, recurring payment on a credit card is different.

  • Start by putting in your request to the vendor.
  • If the vendor continues to charge your card, contact your card issuer. You’ll have 60 days to dispute the charge, starting when the card issuer sends you the statement with the charges.

While your financial institution may stop some payments, you may still be legally obligated for other payments depending on your contract with the service provider.

Further Information About Stop Payments

For questions or concerns about stopping a payment, first contact your financial institution. To receive additional guidance, contact the Federal Deposit Insurance Corporation (FDIC).

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