Guide to checking accounts

In case you haven’t noticed, there’s a bank war out there. Banks are offering all sorts of bells and whistles to attract customers, but what’s actually going to save money, and what is a come-on?

*No minimum balance or start up fees. Many banks offer this, but beware those that offer free checking with a minimum balance. $5000 minimum to save $8-10 monthly charge is foolish because that same $5k can earn interest elsewhere.

*Free checking accounts or checking accounts with a low monthly fee. There’s really no need to pay a large monthly fee with so many places offering accounts at low cost or for free. However, beware the banks that offer a free account, only to have charges on everything else, like per-check fees, ATM fees, online access fees, and more.

*Overdraft protection. Many banks offer this service, which is actually a line of credit. If an account has a $500 overdraft protection clause, any time there is insufficient funds to handle a check, the bank will allow it through, up to five hundred dollars. This amount is paid back via a small monthly fee that is mainly interest, taken directly from your account. One large overdraft could take years to pay back, so if you accidently have to use the service, pay it off immediately.

*Free ATM fees. Some banks charge to use their ATM machines, while some not only offer their free, they will also refund any fees paid to another bank’s ATM’s. In most cases you play the fee at the time, then send in receipts to prove how much you were charged. This amount is then credited back to the account. If you travel a lot, make sure your bank offers this option.

*Free checks. What with ATM machines and online banking, few of us write out actual checks any more, but it is nice to obtain free checks with an account, which will save $10-20 every time checks are ordered.

*Overdraft forgiveness. We all make mistakes, so some banks give one free pass per year. Considering that every time a check is bounced, a fee is paid not only to the bank but to the place the checked bounced, this can become very costly, especially if multiple checks are involved.

*Online account access. Most banks allow customers to be able to bank from anywhere, but do keep in mind that some banks charge extra for this service. It is nice to be able to go online, move money from savings to checking, pay the mortgage, check the balance and more. Some banks offer email alerts, which lets the customer know when the balance is dangerously low.

*ID Theft insurance. Most bank accounts are insured by the FDIC, but now many banks also offer ID theft insurance. If someone fraudulently accesses your identity and your account, you will be protected up to a certain dollar amount.

What if your credit isn’t so great? Is there such a thing as a bad credit checking account? If denied an account, it’s usually not due to bad credit, but because of bad history with a previous checking account. Many banks offer checking accounts with no credit checks, but all will utilize the Chexsys system, which lets the bank know if you’ve had another account elsewhere and if you were irresponsible with it.

Due to the Patriot Act, banks must employ a Customer Identification Program, meaning that they have to identify you beyond a reasonable doubt. In some cases this may require your credit report to be pulled, but mainly for identification purposes rather than to check and see how good you are at paying bills.

If you have further questions about a specific banks policies, look the bank up online or speak to an agent at the bank. Make sure you know all the ins and outs of the account before you sign on the dotted line.