What kind of bank account do you need? Will you be removing money regularly, or do you want to save? Here are some ideas for choosing the type of account that is right for you.
Banks charge fees for keeping your money, even though it is used by them to fund investments. They either charge annual fees for maintenance, checking fees, or both plus more such as deposit box rental. Look carefully at the small print to uncover the various ways in which your money will disappear and expect it: every institution has to make money in some way.
Think of the purpose of the account you are setting up. Having a bank account is an essential part of life, especially if you want to write checks or use a debit card. Eventually, by establishing a relationship with a bank, you will have a history that the institution can assess when you want to take out a loan.
Savvy consumers apply bank account know-how to choose not just a checking account but also a savings account. This latter account can serve one of several purposes. It might be to set aside money for:
There are countless reasons why people save money, if they are able to save at all.
One thing that banks do to try and win customers is to provide extras when their rates might not stand up against those of the competition. For instance, they provide a free safety deposit box for every deposit above a certain amount. They will invest a portion of your savings into community projects that are dear to you. Free internet, mobile, and telephone banking are available. What is important in your life? Ask yourself if a particular institution has attracted you by virtue of these programs and policies.
Compare interest rates between banks. Although sometimes an interest rate will seem high at one institution, it might be because service fees are low. On the other hand, they might just have high fees, period. Their justification does not matter if it does not address your needs in some way.
It is important that you factor your own life into the picture. High fees and high interest combine favorably when your annual savings are considerable, but not when you are only putting away $10 each month. That might make a difference in a few years, but what about today?