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Learn Banking Basics

 California makes it easy for anyone with valid identification to open a no- or low-cost checking or savings account. While some people may still prefer to keep cash at home, a bank or credit union is the safest way to protect your finances. To ensure the safety of your money, deposit it in an FDIC -insured bank account today. Learn the true cost of payday loans and check-cashing fees, find the bank account that is right for you, and avoid unnecessary costs that are cutting into your income. If you or a loved one has a disability, you can enroll in CalABLE, an online savings and investment program designed to help eligible persons save for disability-related expenses without jeopardizing public benefits.

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     Key Terms

    Bank: A financial institution and business that accepts deposits, makes loans, and handles other financial transactions.

    CDFI: Private financial institutions dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream.

    Checking account: An account at a bank (sometimes called a share draft account at a credit union) that allows you to make deposits, pay bills, and make withdrawals.

    Credit score: Numbers created by mathematical formulas that use key pieces of your credit history to calculate your score at a moment in time.

    Credit union: A cooperative financial institution that is chartered by the National Credit Union Administration (a federal independent agency) or a state government and is owned by its individual members.

    Debit card: A plastic card used to make purchases at businesses (like grocery stores and gas stations) with money in your checking account.

    Direct deposit: Money electronically sent to your bank account, credit union account, or prepaid card.

    FDIC-insured: An FDIC insured account is a bank or thrift account covered by the Federal Deposit Insurance Corporation (FDIC), an independent federal agency responsible for safeguarding customer deposits in the event of bank failures. 

    Financial institution: A company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange (e.g., banks, insurance companies).

    Payday loans: A small-dollar, short-term loan that a borrower promises to repay out of their next paycheck or deposit of funds.

    Savings account: An account at a bank (sometimes called a share savings account at a credit union) used to set aside money and that pays you interest.