Plan Your Financial Life (National Academy Foundation)

Chapter Five: Arturo Has a Problem – A Lumpy Mattress

Arturo just finished college and landed his first job. He never thought much about bank accounts before, but now that he has a steady paycheck coming in, Arturo thinks he might need a bank account where he can deposit his earnings. He usually cases his checks at a local check-cashing store, but they charge him $3 every time he does this. After he pays his bills, Arturo puts the rest of his money under his mattress or in some other hiding place. Twice he has forgotten exactly where he hid his money!

Last week, Arturo went to the local bank, but found it very confusing. There were so many different accounts – money market, passbook savings, NOW and CD accounts that all paid so many different interest rates.

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What should Arturo do? How can he decide what type of account he needs? Should he compare this bank and its services to another one? If so, why?