Opening A New Checking Account – 5 Things You Need To Consider
Whether you have never opened a checking account before or are relocating and need to open a checking account at a new bank, there are some things you need to take into consideration before actually deciding upon the bank where you will open your checking account.
The first thing you should do is to check out many banks in your new area before deciding upon one. Consider exactly what type of “coverage” you need. If you travel a lot for work or for fun, you’ll likely want to open a checking account at a bank that has many branches throughout the United States. Doing this will enable you to save upon ATM fees. However, if you don’t travel much, the products and customer service provided by a smaller bank may be a better fit for you.
Credit Unions Usually offer better deals.
If you are accepted by a credit union, you should take advantage of this. This is because credit unions offer lower interest rates on loans and higher interest rates on savings accounts than what banks offer. In addition, the fees charged to savings accounts and to transactions are usually lower than banks as well.
Ask for a List of Fees for Your New Checking Account
The second thing you should do is to make sure that you select the right account that fits you and your needs best. You should pay particular attention to the fee schedules and minimum balance requirements associated with the different accounts that each bank offers. In most cases, having a higher minimum balance will usually enable you to avoid monthly fees being levied against your account, avoid fees being placed on your travelers’ checks and money orders, and earn you higher interest rates than if you are required to have a lower or no minimum balance. It’s important to keep in mind, though, that you can be assessed fees if your monthly balance is under the limit, so if the minimum amount is too high of an amount for you to comfortably maintain, you should choose a different savings or checking account.
Read the Fine Print
The third thing you should do is to read all of the fine print of the terms and conditions that are associated with the account you are considering. Most accounts will limit the number of checks you can write and the number of debit card transactions you can complete. Some people will try to overcome this limitation by setting up personal and business accounts at different banks; this way, they’ll cut down on the number of transactions they make each month with each account. In addition, you may have to pay fees each time you use online banking or pay bills via online transactions. It is important to know all about these fees and stipulations before you set up the account. The only way you can do that is to read the fine print associated with the account before signing up.
Most Banks now Offer Over Draft Protection of Some Kind, but you have to ask.
The fourth thing you should do is determine exactly what occurs when you make a mistake regarding your account. This means determining exactly what your overdraft options are. It is important to keep a running, accurate total of your checking account at all times. Even the most vigilant of us can make a mistake from time to time. One way to avoid overdrawing your checking account is to set up an automatic transfer between your savings account and your checking account. This will allow money to be transferred automatically between the two accounts whenever you overdraw your checking account, thereby enabling you to avoid an overdrawn fee and a bounced check that can ruin your credit.
Other options for overdrawing your checking account include an overdraft line of credit offered by some banks. You’ll pay a transfer fee each time you overdraw on your account, along with interest on the amount that is transferred. Other banks will allow you to go into the negative and then pay what you’ve overdrawn, but you’ll pay a fee for each item they pay for. These options, and especially the last option, are not your best choices for protecting you from overdrawing on your account, as the fees are quite expensive.
Open a Savings Account also for stashing extra cash.
The fifth thing you should do, as was alluded to above, is to open a savings account at the same time you open up your checking account. This will enable you to save money more easily, plus enable you to set up an automatic transfer once per month. Many people will set up this transfer on a payday, thereby instantly transferring the money they receive from their paychecks right into their savings accounts. This makes for easier saving and for gaining interest on their money right away.
As you can see, there are five main things you should check out and evaluate regarding a potential new checking account before actually signing up for one. Choosing the right bank and account are critical to finding the best checking account at the right bank for your particular situation. The best way to determine this is to read the fine print associated with each account. You should also determine exactly what the fees are for overdrawing on your account. Finally, you should also open up a savings account to help protect against overdrawing on your account and to help you save money more easily. By following these steps, you can find the best checking account at the right bank to enable you to get the most benefit from opening a new checking account.
Tags: save money, savings accounts, credit unions, minimum balance requirements