There is a tremendous variation between available bank accounts, not least in the myriad of charges and fees payable, and services on offer. When it comes to opening a bank account, this is not the time to be complacent and opt for the nearest convenient bank. The value of advance comparison shopping cannot be emphasized enough, using a checklist of individual requirements.
The most important thing to be aware of before opening a bank account is to ensure the account is FDIC insured. This is vital for everyone with a bank account, whether savings or checking, as it protects deposits and balances in the event of a bank failure.
People have different expectations and needs for personal banking. Some of the things to consider are the provision of ATM’s; automated bill pay; internet or brick and mortar; ease of transfers between savings and checking accounts; and interest rates. The most important consideration should be the charges levied on these services and the level of monthly maintenance fees.
The majority of bank accounts call for the customer to pay to a monthly fee, though this is often waived if certain caveats are met. These will typically be a requirement to maintain a certain average monetary balance on a daily or monthly basis, or to have a certain amount deposited directly into the account each month. Balance amount requirements vary enormously, making it prudent to compare required amounts. Some may expect a balance of $1,000, others $5,000 or more.
Some banks, typically internet accounts, now offer banking free of monthly maintenance fees, but in the majority of cases some caveat applies. There is no need to pay any monthly fees, thus potential account holders should look for fee free banking or an account that waives fees if they believe the caveat is not an issue.
ATM surcharges are another issue to be aware of. Using an ATM outside the banks own network typically involves ones own bank adding a charge, plus the out of network bank adding a surcharge. Of course charges can be avoided completely if the chosen bank has an excellent supply of ATM’s or if the customer opts to use the cash back option when purchasing goods. The top ATM friendly banks are worth considering for those who regularly use ATM’s and recognize the folly of paying fees to do so.
Interest rates are worth considering even though they are at an all time low currently. Some checking accounts pay interest on balances and with the overall demise in rewards points for debit card usage, it is worth seeking out interest bearing accounts. Other things to consider depending on ones persoanl banking needs are fee free checking; overdraft fees; provision of free telephone banking; e-mail or text alerts; and customer service standards.
The consumer should identify which key features of a bank account they require and then compare accounts with those necessary features. The aim should be to find the account that provides individual requirements at the lowest possible cost or preferably at no cost.