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  • Writer's pictureRyan P. Cleary

Float Finance 2.3: Other Financial Products and Services

In this article we will discuss how your needs should determine which financial products and services you should select. You should consider your needs and shop around for different financial products and services.

Float Finance is a series of accessible articles, tools, and resources designed to empower early career employees and students to navigate their financial journey.

Products and Services Available at Financial Institutions

Financial institutions offer three general types of products and services:

  • Deposit products (such as checking and savings accounts)

  • Credit products (such as loans and credit cards)

  • Other products and services (such as cashier’s checks and money orders)

In this article we are going to focus on the other products.

Other Financial Products and Services

Other products and services help you manage your money, send money somewhere else, or pay bills, for example. This list is not complete and is meant to just provide a quick overview of some of the common products offered by financial institutions.

Check Cashing

This is converting a check to cash. You will generally not have to pay a fee to cash a check at a financial institution where you have an account. However, there may be a fee if you cash a check somewhere where you do not have your account.

Money Orders

Money orders can be used to send money, such as to pay bills or transfer funds to a relative. With a money order, you provide the amount of money you want to pay someone plus a fee to a bank, store, or the U.S. Postal Service. They then give you a piece of paper (the money order) that may look like a check that you can use to send the money. You do not need an account at a financial institution to get a money order. You should be very careful about who you send a money order too- there are many scams that involve money orders and it is extremely difficult to get your money back.

Prepaid Cards

With prepaid cards, you are spending the money deposited onto them. They usually aren’t linked to your checking or savings account. Instead, you (or someone else, such as your employer) load funds onto the card and then you use those funds to make purchases and get cash. Each time you use the funds, the balance on the prepaid card goes down by the amount you used. Often you have to pay fees to use the money on a prepaid card. Many of these cards do not report to the credit agencies- they are different than a secured credit card (a tool that can help you rebuild your credit).

Debit Cards

With debit cards, you are spending the money that is in your checking or savings account. Each time you use the card, the balance in your account goes down by the amount you used, and possibly also by the amount of a fee. Debit cards can be used at automated teller machines (ATMs). They can also be used for purchases, both online and at “point of purchase,” such as at a store, restaurant, or gas station.

Cashiers Checks

These are special checks guaranteed by a financial institution. You will need to provide funds to the bank and they will give you a check in return.

Automated Teller Machines (ATMs)

An ATM can process a variety of banking transactions including accepting deposits and loan payments, providing cash for withdrawals, and transferring money between accounts.

ATM Cards

ATM cards allow you to use an ATM for various account transactions. This card often is also a Debit Card unless you specifically ask your bank to provide an “ATM Only” card.

Remittance Transfers

These transfers are used to move money to a person or business in another country. They may also be referred to as “international wires,” “international money transfers,” or “remittances.” They are similar to money orders.

Currency Exchange

Many financial institutions will also allow you to exchange your money for different kinds of currency. You should be aware that there is usually a fee for doing this and that they may have a minimum amount you can exchange.

Digital Products and Services

In addition to these services, financial institutions also offer products and access online!

Online or mobile banking, including bill-paying services

This refers to managing your accounts using the Internet on a computer or mobile device. You can view up-to-date information on your account balance to help reconcile your accounts on a more frequent basis. It may include bill-paying services where you can set up automatic payments from your account to pay your bills. Some financial institutions can alert you when you have a new bill to pay from some companies, such as utilities. Many online and mobile banking tools allow you to deposit checks remotely.

You use the financial institution’s mobile app and take a picture of the front and back of the check you want to deposit. You may have to write specific information on the back of the check first, such as “For e-deposit only.”

The specific steps may vary depending on the financial institution. The instructions are usually provided on the mobile app. If you have any questions about using a mobile app to deposit checks, ask a customer service representative at the financial institution.

“Person-to-person” payments (P2P)

This refers to mobile apps (like Zelle or Venmo) or other web-based services (like PayPal) that allow person-to-person money transfers. Typically, users link the mobile payment system to their bank accounts or credit card accounts and initiate transfers of funds to others who are also users of the same app or web-based service. There are several mobile person to person payment apps and they differ in how they work. One may let you transfer money after logging into a website. Another may let you transfer money by physically touching your phone to another person’s phone.

Other Financial Service Providers

We believe it is important to also make you aware there are other types of financial service providers. Typically, these are specialty services focused on one or two specific types of products or services. Often, they only extend credit or provide certain services, such as cashing checks. They generally do not accept deposits. They include:

  • Convenience stores and U.S. Post Offices that offer money orders

  • Stores that sell prepaid cards

  • Check-cashing stores and outlets that cash checks

  • Payday lenders that provide small dollar, short-term loans

  • Pawn shops that provide small dollar, short-term loans

  • Vehicle title lenders that provide short-term loans based on a clear title to a car, truck, or motorcycle

Keep in mind that some of these services are known to be extremely expensive- Payday lenders, Vehicle title lenders, Check-cashing stores, and Pawn shops all can carry extremely high fees. You should make sure you fully understand the financial impact of using these services.

These businesses may offer features, such as being open late at night. Or they may allow you to borrow money without checking your credit or verifying your income. However, their products and services often cost more than similar services at financial institutions.

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