If you are like the vast majority of Americans, you need a checking account to pay bills and manage your money. Maybe you recently moved to the area, graduated school and started a new job, or came to the realization your current checking account is not meeting your financial needs – you may be currently evaluating your options to open a new checking account.
Choosing the right account for you involves many factors, including how to you typically make deposits, access your money, pay bills, fees charged, and more. Here are items to consider when choosing the right checking account for you:
Minimum Balances and Services Fees
Some banks institute minimum balance requirements, imposing service fees when those balances are not maintained. You may be responsible for maintaining a daily balance, where a fee is charged any time during the month you fall under the required balance. Some banks calculate an average daily balance. This provides you a little more flexibility as your balance may drop below a set amount for a few days, but you will not be charged a fee if the average balance for the month is above the minimum. Unless you are receiving a tremendous rate or benefits, avoid accounts that charge fees for falling below the minimum balance.
Banks also charge fees for certain activities and services. The most common fee is for Non-Sufficient Funds (NSF). This is charged when you write a check or make a debit card purchase for more than you have available in your account. Of course, the best way to avoid this fee is to keep track of your balance, and only withdraw what you have available; but we realize life happens. The next best option is to set up overdraft protection where money is transferred from a savings account or line of credit you have at the same financial institution to cover the transaction amount so your checking account doesn’t go into the negative.
Today, people are busier than ever. Most people are looking for a financial institution with products and services that enable them to bank on their own schedule. With the addition of weather conditions and COVID outbreaks that both cause branches to close unexpectedly, it only heightens the need to be able to access your funds outside of a traditional branch lobby.
Some institutions charge fees to utilize convenient services such as the ability to pay bills online or withdraw cash from ATMs owed by other financial institution. Here are a few convenient services and what you should look for regarding fees:
Online and Mobile Banking enables you to view account information, transfer between accounts, and even pay bills using your computer or smart phone.
Mobile Deposit enables you to use your smart phone to take a picture of a check and deposit it into your account. If your employer doesn’t offer direct deposit, or you receive a lot of checks, this feature saves time because you can perform this transaction anywhere, at anytime.
Debit Cards enable you to make a purchase online or at a store with the amount automatically debited from your checking account. They also double as an ATM to withdraw cash. Look for an institution that either offers a robust ATM network to make free withdrawals or offers to refund you a set amount for the fees other banks may charge. You can also save ATM withdraw fees by using your debit card at the grocery store and selecting a cash back option.
Electronic Statements provide an ability to access your monthly statement on the institution’s website. Electronic statements reduce paperwork and help prevent identity theft. Plus, if you need to retrieve past statements, they are easily available at your fingertips to access on your computer, tablet, or phone. The cost of printing and mailing a monthly statement has dramatically increased for financial institutions. Many offer perks that are associated with having online statements. Worse yet, some banks charge a fee to receive a paper statement. People don’t need to track statements anymore; if you have to look up information on a statement from months back, it is right at your fingertips with your phone, tablet, or computer.
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Michael Patterson is the Chief Branding Officer for Horizon Federal Credit Union. With 30 years’ banking experience, he has conducted financial literacy workshops to help individuals with banking, budgeting, and career development.