Well, the first indication that you’re money’s in a safe place is the placard that greets you at the door – Federal Deposit Insurance Corporation. This federal U.S. agency, the Federal Deposit Insurance Corporation, typically protects up to $hundred thousand of your deposited funds from loss. Established in the 1930’s, the Federal Deposit Insurance Corporation became a way to curtail the runs on banks that occurred directly after the Great Depression. By 1934, with the initiation and support of the FDIC legislation bank runs had been reduced by nearly 4000.

In addition to Federal Deposit Insurance Corporation protection, banks also invite supplemental banking insurance from private carriers. This insurance is set up to protect investors’ funds from vandalism and bank robberies.

Banks offer a variety of alternatives to their customers, many of them an evolution of the traditional checking and savings account operation. While a current account is still the most familiar and most common banking feature, there are now a variety of current account choices – some, known as negotiable order of withdrawal (NOW) accounts, actually pay interest on the balance. Besides the traditional savings account, banks also now offer loans, certificates of deposit, and money market accounts. Some offer IRAs and education savings accounts.

With a traditional savings account, you’re able to deposit and withdraw virtually at will, without any minimal deposit or balance required. For this you earn a small interest – currently at an all time low range of sixty-two percentage.

A money market account offers the immediacy and convenience of a traditional current account along with the interest bearing advantage of a savings account. There is some limitations, however. Generally you can write just some checks per month – at some banks as few as three. You’re also limited to just a few more withdrawals as well. You will also be held to a minimal running balance, although a money market account almost always pays more interest than a traditional savings account.

A certificate of deposit is a banking account bought in a specific amount for a specified time period. Banks traditionally offer a variety of periods of time for certificate maturities – anyplace from 30 days to 15 months. The longer the time to maturation the higher the interest rate paid. For the length of the certificate, however, you’re not able to withdraw any of the funds.

Individual retirement accounts (IRAs) and education savings accounts are designed to accrue a substantial amount over a lengthy period of time for a specific purpose, IRA’s for retirement, education savings account for college education. They generally offer the highest interest rate but also deliver hefty financial penalties for early withdrawal except for emergency hardship situations.

With as many options as are offered by today’s banks, and the protections established by the FDIC, you can indeed bank on your local bank.