Your bank is probably the professional organization you deal with most. If it drives you nuts, move on. Whatever your stage in life it’s a good idea to see whether there are better options out there. Things you need to look for include deposit protection, branches where you want them, good ATM availability, reciprocal arrangements (should you travel around the country) and low fees.
First, check that the bank is insured by the Federal Deposit Insurance Corp. This means your deposits will be protected up to $100,000. You will find FDIC stickers displayed on doors and teller windows. Then compare the costs of accounts among banks in your area. Look at what types of transactions you generally make and evaluate account options based on your own needs.
Check the fees
They’ll get you for anything. Check the rates for ATM usage, sending out canceled checks with monthly statements balance inquiries, using a live teller, flat monthly fees, per-check fees, overdraft protection fees, fees for going below the minimum balance, bounced check fees, fees for using another bank’s ATM, stop payments on checks, and amazingly, closing your account.
Thought about credit unions?
Credit unions are member-owned and don’t pay stock dividends so their fees are generally lower than commercial banks. They are also federally insured. Some of the larger ones offer bank-like services such as having branches and ATM networks although they generally offer fewer banking products. Many companies, unions, state and local governments and communities have credit unions that you may qualify to join. If one family member qualifies, usually everyone in the family can join.
While banks may use different names for the accounts, the following types of checking and savings accounts are offered by most financial institutions.
Regular Checking
Generally, this type of account is for the customer who does not maintain a high balance and uses a checking account for paying bills and daily expenses. Some basic accounts may require either direct deposit or a low minimum balance to avoid any fees. Look for a bank that offers a checking account linked to another account. Your savings balance may offset your checking account balance requirement.
Interest-bearing checking
This is a simple way to earn interest on the funds you have on deposit. With these accounts, the higher your balance, the more interest you earn. This type of account usually requires a minimum balance to open and an even higher maintained balance in order to avoid fees. Interest is usually compounded daily on the average daily available balance. If you cannot maintain high minimum balances, avoid these accounts as it may cost you more in fees than the low interest you’ll earn on your balance.
Joint Checking
This is an account owned by two or more people. Each person has equal access to the account. Most accounts, including checking, savings or money market, allow for joint use.
Express Checking
These accounts are popular with students and young customers who rarely visit a bank. They usually offer unlimited check writing, low minimum balance requirements and low or no monthly fees. The downside is that teller fees will be charged per visit.
No Frills Checking
These “no-frills” accounts are for people who don’t write many checks on a monthly basis and cannot meet minimum required balances to avoid regular checking fees. No-frills accounts usually apply low pre-set monthly fees, require low, if any, minimum balance and allocate a specific number of checks each month.
Savings
Savings accounts allow you to make withdrawals, but you can’t use checks on them. The number of withdrawals or transfers you can make on the account each month may be limited. Many banks offer more than one type of savings account (i.e., passbook savings, statement savings). With a passbook savings account, you have a record book to enter withdrawals, deposits and keep track of transactions. With a statement savings account, the institution mails you a statement that shows your withdrawals and deposits. As with other accounts, there may be various fees on savings accounts, such as minimum balance fees.
Special Accounts
Some banks offer special accounts for children, students, senior citizens or special savings plans such as Christmas Clubs or Vacation Plans. These accounts usually don’t carry any fees. The benefits vary but may include free checks, ATM use, preferential rates on loans and credit cards, or discounts.
Money Market
These accounts combine checking with savings and/or investment opportunities and help you earn more interest. They require a high minimum balance to open (usually $1,000 – $10,000), and higher balances are usually required to avoid fees. You are able to make withdrawals, but there are usually limitations on the number of checks you can write. A Money Market account is for people who want to put their money where it will earn a market interest rate. These accounts pay more interest than basic checking or savings accounts; however, the interest rates can fluctuate, depending upon market conditions
