Example 1 (third person): Jimmy never saw Rachel rob that bank.
Example 2 (first person): I never saw Rachel rob that bank.
Example 3 (second person): You never saw Rachel rob that bank.
Read the three examples above, one at a time. Imagine each as the first sentence in a short story, and think about where you would expect the story to go from there. Better yet, imagine you’re sitting on a park bench with a total stranger, and this is the first sentence of a story they tell you. Note the dramatic difference in effect, even though only one word changes. Note the change in your assumptions about the narrator, particularly his or her reliability. Do you find yourself, unconsciously, wondering whether you can trust what this narrator is telling you?
I have heard authors variously refer to this as voice, perspective, or mode, but as I understand it (and Wikipedia, at least, agrees), the correct term is point of view. The role your narrator (and, in second-person, your audience) plays in the story has major ramifications on the reader experience. It is critically important for the author to realize this, and to choose the right point of view to have the effect he or she wants.
Let’s do one more, with a more significant change. Think about how much this changes the way you read the sentence, and how you immediately make assumptions about Jimmy, about Rachel, and about the narrator.
Jimmy told me he never saw Rachel rob that bank.