Features with your bank account to review

Comparing Services Offered

Here’s a brief list of some of the general services you may be looking for in your bank.

• FDIC Insurance
• Online Bill Payment
• ATMs
• High-Interest Checking Accounts
• Funds Availability Schedule
• Debit and Credit Cards
• Money Market Accounts
• CDs
• Brokerage Services
• Mortgage Loans
• Convenience
• Overdraft Protection
• Express Checking Accounts
• Credit Cards
• Loan Products
• Telephone Banking
• Direct Deposit
• Personalized Checks

Comparing Interest Rates

If the account you are looking for pays interest, determine what is the rate currently is. Be sure to read the annual percentage yield offered on the accounts which make it easier to compare similar savings products. Keep in mind that after you open your account, your rate may change from week to week. If the bank changes the rate after you open the bank account, determine what the new rate will be and how frequently it can change. You may want to inquire on whether the bank pays different levels of interest depending on the amount of your bank account balance. If the interest rates paid are tiered based on balances be sure to investigate how it is interest calculated. If there is a bare minimum balance necessary to accrue interest, determine what is the minimum balance required to earn that rate.

Bank Fees and Costs

Bank fees continue to escalate throughout the banking industry. Bank fees are a major revenue producer for banks. Banking fees have already risen significantly in recent years, and are not likely to decline in he near future. Banks collect fees on variety of different services and products. The average cost of keeping a bank checking account has risen over the years as banks use the consistent flow of fees to enhance revenue. The fees a bank charges are not sensitive the ups and downs of interest rates and can often be easier to manage from the banks perspective.

Before you open up an account, take a close look at all the fees associated with the account, and approximate what fees you may incur and what that account will cost over time. You might not be able to determine it exactly, but an estimate will still be useful. When comparing the expected fees of one account with another, be sure to also factor in any difference in the interest rate the two accounts offer. The best protection from high fees or excessive mounts of fees is to be aware of the fees you are paying and not blindly accept the terms of the account. Your bank or any bank is a business; if you don’t like the fees you are paying, you can always take your money to the competition that offers the rates an services that fits your needs. Many banks count on the fact that once you’ve gone through the process of selecting a bank and opening one or more accounts, you probably won’t be prone to switch over to another competing bank.

When comparing the fees of one bank account with another, be sure to also factor in any difference in the interest rates paid on the accounts. If one account pays sufficiently higher rates than another, it might more than offset the additional fees that account charges and be of little benefit if not a detriment in meeting your needs.

Minimum Balance Requirements

A minimum balance is the least amount of money a bank requires you to keep on deposit to either qualify for ceratin benefits or to avoid a penalty fee. There are two main ways to calculate the minimum balance. One method calculates the minmum balance for the month. In this method, the total smount of funds on deposit duirng the month will be averaged over the month to see that the mimium balance is maintained. The second calculation simply monitors to see if the account fell below the minimum balance druing anytime during the month. Taking advantgae of bank offers that require a minmum balance can be fruitful, make sure you undertand the terms and compare that offer with similar offers. These accounts can goble up your resources if the benefits and the terms do not meet your needs and habits.

Is there a minimum deposit requirement?
What is the minimum deposit required to open an account?
Will you pay a flat monthly fee or account maintenance fee?
What is the charge for writing a check that bounces (a check returned for insufficient funds)?
What are the fees if you deposit a check written by another person, and it bounces?
What is the fee if you request the bank to stop payment on a check you have written?
What is the fee if you request the bank wire transfer?
What is the fee if you request Cashier’s checks?
What is the fee if you request a Money Order?
How much does ordering checks costs?
Will you be charged for each check you write?
Will you pay more if you write a large number of checks?
Is there a charge if you use ATMs to make deposits and withdrawals on your bank account?
What are the fees if your transaction takes place at an ATM owned by another bank?
Is there a fee if the balance in your bank account drops below a specified (Low-balance penalty)?

What are the ATM charges or surcharges for out of network use?
Are there fees for returning cancelled checks? (If the bank doesn’t include cancelled checks along with the monthly statement, there will usually be a fee for any cancelled checks you request)
Is there a charge for each deposit and withdrawal you make?

Other fees a bank may charge for that should be considered:

Abandoned account fee
Account closed early
Account research/ reconciliation
Coin counting
Debit card
Deposited item returned
Inactive account
Money orders/cashier’s check
Return of checks with statement
Safe deposit box

Other account features to review

Rates, fees and product depth are not the only things to consider when looking for a new bank. Keep in mind you’re buying services. When you evaluate your priorities and look at the services of several financial institutions take a moment to think about the qualitative factors as well. Issues you may want to consider include:

Measure the overall convenience of local branches. How close do you work or live in relation to the nearest branches? v
What are the hours of operation.
How comfortable do you feel at each institution?
How helpful were the tellers?
Were they personable and attentive?
Were the managers and loan officers accessible?
Are the hours of operation of the bank compatible with the hours you wish to do your banking?

Is the location convenient?

Other financial factors to evaluate:

Are there any limitations imposed on the account?
What are the charges for overdraft protection?
How large is the bank?
How many branches does it have?
How many ATM machines are owned by the bank that can be accessed without charge?
What features are available for banking by telephone and are there limitations to their use?
Is online banking availability and are there any limitations to its use?
Does the bank offer credit cards?
Does the bank make debit cards available and what are the related fees?v
What products are offered for consumer loans and mortgages?
Are there services and products for retirement planning?
Does the bank provide small business services and products?
Are there any special offers for first-time account holders account holders with a large minimum balance, senior citizens, students, or other groups?

Considerations To review When Comparing Certificates of Deposit

The starting point of CD analysis is often determining the best CD rates available. However, along with searching for the best CD rates it is important to evaluate other features of both the bank and the CD features. Find out the term of the CD account. In other words, how long is it until the CD maturity date? Ascertain when the CD account does mature, will it roll over automatically? In other words, does the account renew unless you withdraw your money at maturity or during any grace period provided after maturity? A grace period is the time after the CD maturity when you can withdraw your money without penalty. If there is a grace period after the maturity, how long is it?

If you are allowed to withdraw your money before maturity, will the bank impose a an early withdrawal penalty? Since this is generally always a true condition, be sure to appreciate how much the penalty for the early CD withdrawal will be. Will the bank regularly send you the amount of interest you are earning on your account or will they regularly credit it to another account of yours, such as a savings or checking account.

Finish off by concluding if the bank has any other limits or features attached to the terms of the CD.

Consumers who do not review the fees and cost associated with their bank accounts or review the potential to earn a higher rate of return at other financial institutions are just missing out on easy money. In volatile markets or markets where the overall rate of return is low, it becomes even more imperative to investigate the variety of accounts, costs and rates of return paid on bank products.

This entry was posted on Sunday, October 12th, 2008 at 11:53 am and is filed under Banking and CD Guide. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.