The Importance of Bank Account Shopping
With banks charging $3 checking account fees and new $5 debit card usage fees per month, most consumers can’t help but feel ripped off. With more and more banks tacking on fees for the little things, you may end up paying $100 every year just for holding an account, but is that really necessary?
In short, no. You have a choice when it comes to your financial institution and the types of bank accounts you hold and shopping around for that elusive bank with zero fees, free checking and extra perks is not as difficult as it sounds.
Before you decide, visit different bank websites and look for their fee schedule and rate sheets on current accounts. If you come across one that charges exorbitant maintenance and ATM-usage fees, keep looking.
Consider researching local credit unions and regional banks to get away from fees imposed by bigger national banks. Ask your friends and family where they bank and how satisfied they are with the services.
If you prefer a national bank, ask yourself if it is worth it to you. Does the bank provide extra services that are valuable to you in exchange for charging extra fees? If so, it’s probably the best bank for you.
You may be able to open a bank account online, but most require you to show up in person. Come prepared with your Social Security number and driver’s license or other state-issued ID.
Generally, most people will start out with a regular checking and savings account. A checking account allows you to make purchases by writing checks and also lets you receive paycheck deposits from your employer.
A regular savings account provides a place for you to set aside money and it may come with limits on how often you can make withdrawals. One credit union requirement is that you have to keep a certain amount of money in savings at all times to hold your share in the credit union. Usually, this amount is no more than $25.
For those that prefer an account with a higher interest rate, a money market account or certificate of deposit are straightforward.
A money market account requires a minimum balance and withdrawals are typically limited to six each month. Each bank may have slightly different rules regarding money market accounts, so read the fine print carefully.
Certificates of deposit (CDs) allow you to make a deposit and agree to leave it alone for a set period of time. The balance will mature once this set time limit is up, giving you a higher rate of return as far as interest is concerned.
Before settling on a money market or CD, check CD Rates and compare different bank and credit union rates on their current accounts as you may get a higher interest rate by shopping around.
Always research overdraft fees before opening a new account. Although you may never think you will be overdrawn, mistakes and oversights happen.
Certain banks are known for hitting their customers hard with massive overdraft fees, so much so that recent laws were enacted in an effort to protect consumers.
Banks that still charge excessive overdraft fees are doing so illegally and this should raise some red flags as far as how you can expect to be treated as a customer.
Look at your current accounts and ask yourself if you can be earning higher interest and racking up fewer fees somewhere else. If the answer is yes, it’s time to switch banks.
The following post was brought to you on behalf of Money Supermarket.