Choosing a Bank
Choosing the right bank can be a difficult. Many banks are offering more services and charging more fees than ever before. When selecting a bank, make a list of your own banking habits, and what you want from your bank. this will help you evaluate and compare banks. Here are some ideas about what bank services and fees to compare:
Close is not necessarily better. Consider whether or not you are willing to pay higher fees for better location, or if lower fees may be worth a little travel.
"One Stop Shop or Diversity?
Relationship Banking is when a bank encourages you to place all bank accounts, credit cards, mortgages, etc., with one bank. The advantage of relationship banking is that your bank may offer special deal and reduced fees if you do this. The disadvantage is that you are only insured for $100,000.
Automatic Teller Machines (ATMs) Usually using your own banks ATM is free, but your bank may charge you an average of $1.00 to $1.50 each time you use another banks ATM. Then you may also have to pay an additional fee $1.00 to $2.50 to the bank where you do not have an account for the use of its ATM. Compare fees being charged by the bank for the use of its own ATM by its account holders and for the use another banks ATM.
Minimum Account Balances
Many banks require balances of $1000 or more or more in order to get free checking or savings accounts. a New trend if free checking for new customers for the first 6 months. Consider the amount of interest you might earn on that same $1500 if placed in a savings account or a CD. also compare the monthly general maintenance fees charged by banks on checking and savings accounts.
Read the fine print about how the bank calculates fees if you fall beneath this minimum balance. One way is to charge a fee if the average daily balance over one month is lower than the minimum another does it immediately upon the balance falling.
Interest Bearing Checking Accounts
There are expenses and benefits to interest bearing checking accounts versus savings accounts or CDs. You can usually earn more interest in a savings account, money market or CD, instead of an interest bearing checking account. If you routinely keep enough money in your checking account to meet the minimum balance, gaining interest on that money is a bonus. However, if you don't to meet the minimum balance requirements, an interest bearing checking account usually will have a higher monthly fee than a one that does not earn interest.
Special Bank accounts, for children, students and senior citizens, and special savings plans, such as "Christmas clubs" or vacation plans normally do not carry any fees.
New Trends at many Banks are Fees for Special Services
Many banks are now charging high fees for copies of canceled checks,account research and copies of bank statements.
Overdraft protection is a service that can be very helpful to avoid returned check fees. Be sure to carefully review the terms of the agreement before you sign. Some banks are actually offering short term loans as overdraft protection, which requires a credit check and they charge you interest on the money loaned to you by the bank to cover what would otherwise be a bounced check and they might still charge you a fee for the service.
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Banks are now encouraging both individual customers and businesses to use direct deposit services. Through direct deposit, your paycheck or government issued check is deposited directly into your bank account. No paper check is issued, and your entire check is available as cash. Some banks are offering reduced or waived monthly maintenance fees, free ATM usage and other incentives to sign up for direct deposit.
Another special service that banks offer is selling checks. Many banks offer a certain amount of free checks as an incentive to open an account. Checks are often cheaper when purchased directly from a check printer.
Charges Per Transaction
Along with the monthly fees that many banks charge, some also charge fees per transaction, such as writing a check, moving money from one account to the other, checking balances at your an ATM, or withdrawing money through an ATM. These fees and really add up. Be sure to ask for and thoroughly review a list of all fees charged by the bank.
A fast growing area of most banks is online banking services through which all banking transactions can be done from a your pc with Internet access. Ask if the bank charges a monthly access fee for these services. If you to use online banking services to pay your bills, the bank may charge a monthly fee for this service, although more banks arnow offering this for free.
Beware of unfamiliar online banks, ther armany scams on the web and no bank regulatorsonthe web. Check the Web sites "About Us" page to see whether the bank has physical offices in the United States. Be sure that deposits with the online bank would be covered by insurance through the Federal Deposit Insurance Corporation (FDIC); look for the familiar FDIC logo or the words "Member FDIC" of "FDIC Insured" on the site. If you choose to use a bank chartered overseas, the FDIC may not insure your deposits.
Some traditional banks may use a different name for the online presence of their bank, for insurance purposes. If this is the case, be aware that your deposits at the parent bank would be added to any separate deposits at the online version of the same bank, and the total would be insured by the FDIC only for the maximum allowed for a single bank.
Be sure that transactions through online banks Web site will be secure - encrypted. In the address window of your browser, check to see that the first part of the online banks Web address changes from "http://" to "https://;" and also check the lower corner of the Web page to see whether a lock or key symbol appears, signifying security.
If you use online banking services to pay bills, keep good records of your transactions. Make sure they have a a toll-free cutomer service number or email address, in case you need help.
Making choosing a bank even more difficult is the growing number of bank mergers, which can change a banks policies and fee structure overnight. Be sure to thoroughly read any new rules and regulations sent to you if your bank is bought or merges with another bank.
If you would like to file a complaint against a bank, contact the following:www.occ.treas.gov, or by e-mail at[email protected].
The Office of Thrift Supervision
regulates savings banks and savings and loan banks having the word "Federal"
in their name or which use the initials FSB (federal savings bank) or FSLA (federal
savings and loan association). You can contact this agency by writing to them.