Jordan (example) keeps $1,800 in a payment app balance and never moves it to his bank. Which is true?

The app isn't a bank. Insurance applies only once money sits at an insured bank, and only if that bank fails.

It's FDIC-insured because the app works like a bank.

Every money app carries $250,000 of coverage by law.

It's insured as long as he uses the app every week.

Unless you opt in, a bank can't charge an overdraft fee on which transactions?

ATM withdrawals and one-time debit card purchases.

Every transaction, checks included.

Which feature does every Bank On certified account have?

A $35 overdraft fee that's waived once a year.

A $25 monthly fee with no way to waive it.

A $500 minimum deposit to open.

Malik (example) deposits a paycheck with his phone on Friday. What decides his deposit limit and how long the money is held?

His bank's own mobile deposit rules, so he should ask.

Nothing, because mobile deposits are always available the same day.

The employer who wrote the check.

A federal rule that makes every mobile deposit available in full the next day.

Tina (example) scores her account and it fails four of the ten questions. What should she do?

Open a new account first, move direct deposit and automatic payments, then close the old one.

Close the old account today, then shop for a new one.

Keep it and opt in to overdraft so the bills get paid.

Move only her direct deposit and leave the automatic payments on the old account.

Why does the lesson suggest a separate savings account named Winter Fund?

It keeps off-season money apart from spending money.

Checking accounts can't hold more than $1,000.

Savings accounts are insured and checking accounts aren't.

So the bank can lend it back to you in winter.

Lesson P101.4 · Personal Finance 101: Get Control

Choosing a bank or credit union

5-minute read · Figures checked October 2026

A customer slides a card across a wooden bank counter window — Photo: Andrea Piacquadio / Pexels, Pexels License

The short answer

Pick an account that's insured, costs little or nothing, and fits how you're paid. Make sure the bank is FDIC-insured or the credit union is federally insured by the NCUA. Then check the fees that hit weekly and seasonal pay hardest: monthly fees, overdraft and NSF fees, ATM fees and minimum balances. Add a separate savings account for your Winter Fund.

Insured comes first

Deposit insurance protects your money if a bank or credit union fails. At FDIC-insured banks and NCUA-insured credit unions, it covers $250,000 per depositor, per insured bank, per ownership category. Banks show "Member FDIC." Credit unions show that they're federally insured by the NCUA. If you don't see it, ask.

Payment and money apps aren't banks. Deposit insurance applies only once your money sits at an insured bank, and only if that bank fails. Money sitting in an app balance may not be covered at all (lesson P101.6 has more).

Fees that hit weekly and seasonal pay

Monthly fee. Many accounts waive it with direct deposit or a minimum balance. Check that you'll still qualify in January, when the checks slow down.
Overdraft and NSF fees. An overdraft fee is when the bank pays something you didn't have the money for and charges you. An NSF (non-sufficient funds) fee is when it turns the payment down and charges you anyway. Example (made-up fee): a $35 overdraft fee six times a year is $210.
Overdraft opt-in. A bank can't charge you an overdraft fee on an ATM withdrawal or a one-time debit card purchase unless you opted in. You can opt out at any time. Checks and automatic payments can still bring fees.
ATM fees. Look for free ATMs near home and near the yards and job sites where you work.
Mobile deposit limits and holds. For many check deposits, federal rules make the first $275 available the next business day. Mobile deposits follow your bank's own rules, so ask about limits and hold times.
Early direct deposit. Some accounts post your pay early. It's handy, but it's no reason to pay a monthly fee.

Bank On accounts and credit unions

Bank On certified accounts meet the Bank On National Account Standards: they cost $5 or less a month (or $10 or less if there are two ways to get the fee waived), take $25 or less to open, and charge no overdraft or NSF fees. The Bank On finder lists them.

Credit unions are owned by their members. Each one has its own membership rules, often based on where you live or work, so ask. Many are easy to join. Wherever you look, ask about service in Spanish or another language if you'd like it, and whether there's a branch or a free ATM near your work.

Whichever you choose, open a separate savings account at the same place and name it Winter Fund, so your off-season money stays apart from your spending money.

The 10-question checklist

Every "no" is a fail.

Is it insured by the FDIC or the NCUA?
Is the monthly fee $0, or waived in a way you'll still meet in winter?
Are you opted out of overdraft on debit card purchases and ATM withdrawals, or does the account charge no overdraft fees?
Is the NSF fee $0?
Are there free ATMs near home and the places you work?
Is the minimum balance low enough that a slow month won't trigger a fee?
Is the mobile deposit limit high enough for your biggest check, with holds you can live with?
Can you split your direct deposit into a savings account at no cost?
Can you get help in the language you prefer, by phone or in person?
Do you get alerts for low balances and deposits?

Your Move

Do this week

Pull up your last two statements and your bank's fee schedule (in the app or on its website).
Score your account on the 10 questions and count the fails.
If it fails three or more, open a Bank On certified account or a credit union account before you close the old one. Move your direct deposit and every automatic payment, wait until everything has cleared, then close the old account.
Either way, open a savings account named Winter Fund where you bank.

Log it: Bank account scored.

Common questions

Is my money as safe at a credit union as at a bank?

If the credit union is federally insured by the NCUA, your deposits get the same $250,000 coverage per depositor, per institution, per ownership category as at an FDIC-insured bank.

Should I opt in to overdraft coverage?

If you opt in, the bank can pay a debit purchase you can't cover and charge you a fee. If you stay opted out, it can't charge an overdraft fee on those purchases, and the card is usually declined instead.

How do I switch banks without missing a payment?

Open the new account first. Move your direct deposit and every automatic payment, and leave a little money in the old account until the last payments clear. Then close it in writing and keep a copy.

Watch out for

"Free checking" that charges a fee when your balance drops in the off-season.
Overdraft fees on checks and automatic payments. The opt-out covers debit card purchases and ATM withdrawals only.
An app that looks like a bank. Find out who holds the money and whether it's insured.

Free help

Free practice

Lesson check

5 questions on this lesson, one at a time, with the answer and the reason after each. Pass with 4 right, including every must-know question.

This is general education, not tax, legal, investment or insurance advice. Rules change and every situation is different. Check the sources below, and talk to a qualified professional before you act on it.

Sources

FDIC: Understanding deposit insurance; The importance of deposit insurance and understanding your coverage (2022)
NCUA: Share insurance coverage
Consumer Financial Protection Bureau: Regulation E, § 1005.17, requirements for overdraft services; Regulation CC threshold adjustments
Bank On: National Account Standards; account finder

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