The Basics of Banking: Part 3

Checking and savings accounts are two of the most common services banks provide. But why do we need them? And why put your money in a bank in the first place?

You could keep all your money in cash, but you’d have to carry it with you at all times or keep it stored somewhere. Cash is typically more vulnerable to being stolen or lost, and can be damaged in a disaster like a fire or flood. 

Depositing your money in a bank is a much safer option. Banks follow very strict rules to keep your money safe. As of 2020, the Federal Deposit Insurance Corporations (FDIC) insures deposits up to $250,000 per depositor for each ownership category as long as the institution is a member firm.

At banks, most people keep their money in checking accounts and use them for buying everyday items like food or paying monthly bills. Using a checking account is pretty simple. For example, if you’re buying groceries, you write a check or swipe your debit card for the amount you owe the store. Writing a check is becoming less common, with most people now choosing the convenience of a debit card.

Checking accounts require keeping track of your money carefully and recording every transaction. If you write checks or swipe your card for more money than you have in your account, you’ll get charged overdraft fees. This means you’ll have to pay the bank for the amount of the transaction plus an additional fee. Overdraft charges can add up fast and cause financial strain, so be sure to stay on top of your spending.

If you want to stash money over the long term, a savings account is a smart choice. Savings accounts earn interest, which means the bank puts a small amount of extra money into your account each month based on how much you have. The more you have in your account, the more interest you earn over time.

You don’t have to be an adult to have either checking or savings accounts. Many banks allow kids as young as 13 to have their own accounts. In fact, many experts recommend teens open their own accounts as soon as parents or guardians are comfortable. 

Origin Bank offers a student checking account that’s easy to set up. Kids need a valid high school or college ID and an adult to sign for them if the child is under 18 years of age. Origin will even waive the monthly $8 service charge.

Student accounts get the entire Origin checking service – free mobile banking, mobile deposits and mobile payment services like Zelle. They also come with our 24/7 customer support and personal bankers to help answer your questions. 

Having a student account helps kids learn the basics like filling out deposit slips and keeping up with transactions. They also learn the value of saving, of setting goals and learning about the time and work needed to reach their financial goals.

Origin encourages parents to involve kids in financial decisions, small or large, at an appropriate age. Talk about how financial decisions are made, making budgets and the kinds of expenses that fit with them.

At Origin, we believe it’s never too early to build good money management skills. With a solid foundation, kids and young adults develop the knowledge and financial habits that help them become independent adults and avoid common mistakes that can lead to long-term struggles.


Next, we’ll discuss the basics of ATMs, debit cards and credit cards within our Basics of Banking series. Explore our blog for more financial resources.