Ever wonder what alternatives you have to traditional banks and credit unions?
Well, there's always Uncle Cletus, who'll be happy to keep your money for you under his porch. Except he has raccoon problems, so he's probably not your best bet. You're not out of luck, though. You can get many or all of your banking needs serviced at places other than traditional banks.
One new development is Internet banks, which have no physical, brick-and-mortar presence at all. These have become more popular in recent years because oftentimes they offer services with more attractive benefits. In addition, many traditional banks are now offering online banking services. These allow you to pay bills, check on your account, and do much more -- all from the comfort of your own computer. Some deposits are mailed in, while many are made via direct deposit. Withdrawals are usually made through other banks' ATMs or transferred into an account such as a checking or savings account through your local bank. Some Internet banks allow customers a certain number of free ATM transactions per month.
Also, not everyone realizes it, but many brokerages today, such as TD Ameritrade
Another nifty advantage of brokerages serving as banks is the availability of margin. Margin is when you borrow money from your brokerage against the value of securities in your brokerage account. This is usually used to buy additional securities, but it needn't be. If you need to borrow a few thousand dollars, you might spend a lot of time getting a loan from your bank. Or, through a brokerage-bank, you can simply ask for a check drawn on margin on your account. Easy as that. (There's a little more to margin, though, and it should be used in moderation. Make sure you learn all about it before you use it -- or worse, overuse it.)
You can also learn all about brokerages and find one that's right for you in our Broker Center. (Did you know that some well-regarded brokerages are offering commissions as low as $5?)