Introduction

Some young savers stash their cash in shoe boxes or jelly jars. Others use “piggy banks,” which today look more like spaceships or cartoon characters. In any case, the same problem arises. Sooner or later, the piggy bank or jelly jar fills up, and you have to make a decision: 

Should I spend the money or continue to save? And if I continue to save, should I open a bank account or just find a bigger jar? Maybe you’ve had to face such a decision yourself. If you decide to keep your money at home, it will just sit there and won’t earn any extra money for you. 

You also run the risk that a burglar, a fire, or some other disaster will wipe out your savings in the wink of an eye. Then again, if you open a bank account, you can’t “visit” your money as easily as you can when it sits in your dresser drawer. You can’t just walk into a bank in the middle of the night to count your cash. You can’t run the coins through your fingers or toss the bills in the air and let them rain down on your head. 

Opening a bank account is a big step because you are putting your money in someone else’s hands. You’re counting on someone else to handle your money responsibly. 

Before you do that, it might be a good idea to understand how banks operate. That’s the purpose of this pamphlet. It won’t tell you everything there is to know about banks and banking, but we hope it will be a good basic introduction.