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Hey, so I don't know about you, but as a kid when I heard the words bank account, I pictured Scrooge McDuck taking a dip in his coinage sea. As it turns out, not so much the case. But bank accounts are still A++ and today we're going to chat a little bit about how and why you should open one.

Let's start with the basics of a savings account. You deposit money into the account and it hangs out earning a little bit of interest. Deposits made at banks into a savings account are insured by the government from $250,000 per depositor per bank so your money is guaranteed to be there.

Savings accounts are a great way to keep money for short term savings goals or for emergencies that may come up because the money is readily available. Cash in a savings account is what's known as liquid which means it's readily available as opposed to money which has been invested in say the stock market or in gold which would require you to sell that asset in order to get the cash in hand.

Chequing accounts work similarly. You or your employer deposit money into the account and then you use cheques or a cheque debit card in order to pay your bills. Get it? The sad news, chequing accounts don't usually pay interest. The glad news, similar to a savings account, the money in your chequing account is safely insured by the FDIC for up to $250,000. Also good news, your debit card is likely accepted wherever credit cards are accepted.

The difference between a credit card and a cheque debit card is that with a debit card, the money you spend is instantly subtracted from your account whereas with a credit card, you are billed for those expenses later. We'll chat more about debit verses credit in a future video.

Opening a new chequing or savings account is fairly straight forward. You might prefer the personalized feel of a brick and mortar bank or you might like the flexibility of an online bank. Either way, the process is going to require several things. An application form which you can pick up at the bank or fill out online. A driver's license or your ID card. Your social security number and you may also be asked for your current physical and email addresses.

So lets walk through the process of opening a chequing or savings account at Ally, a well known online bank. Obviously we here at how to adult don't endorse any particular financial institution but we're going to use Ally as an example and the process should be pretty similar at any other online bank.

Number one, choose whether you are a new or returning customer.
Number two, choose which type of account you'd like to open. 
Number three, next you'll enter your personal information. This is the info we discussed earlier. When you finish entering your personal information, click through to step four, creating your account. Step five allows you to make an initial deposit. Finally, step six allows you to set up an online banking username and password. And now you have a chequing and/or savings account, huzzah!

If you have any financial questions for us for future videos please leave them for us in the comments section below. We would love to hear from you. In the meantime, I'm just going to take this awesome catchphrase I just thought of and I'm going to deposit it in my mind's savings account because we know, there's a lot of interest. Get it?