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What You Need to Know about Banking

When it comes to choosing a bank, consider both convenience and cost. Some charge flat monthly fees; others charge a fee for each check written and each deposit made. Some charge if you go below the minimum balance, use a live teller, use another bank’s automated teller machine (ATM), make an account balance inquiry, have your canceled checks returned to you each month, or close your account. Most charge for bouncing checks, placing a stop payment on a check, and using your overdraft protection.

Reconcile your checkbook monthly and review your credit card statements for errors. Scam artists are finding new ways to target these two areas and if you’re not alert, you could get taken for a ride.

Review your banking habits, identify the services that are most important to you, compare fees for those services between several different banks, and then choose the bank that

fits your needs for the best price. If you use ATM machines to withdraw cash from your account on a weekly basis, for example, you wouldn’t want to choose a bank that offers free checking but charges a hefty fee for ATM transactions. You may decide to use a traditional brick-and-mortar bank in your neighborhood or an Internet bank in cyberspace.

In today’s world, you’ve got a few options when it comes to banking. One such option is to pick a credit union over a traditional bank. Banks are owned by investors; credit unions are owned and controlled by customers, who are members. Credit unions are nonprofit organizations and return surplus earnings to members by lowering interest rates on loans, increasing interest rates on deposits, or offering free or low-cost services.

The most basic requirement for any bank or credit union you choose is that it must be insured and fully backed by the U.S. government. This ensures that your account will be protected for up to $100,000, or $250,000 for retirement accounts. For credit unions, the National Credit Union Association (NCUA) provides coverage. Banks may be covered by the Federal Deposit Insurance Corporation (FDIC).

In Retreat, Bank of America Cancels Debit Card Fee

Some banks have options that can benefit you, and others charge excessive fees. Rather than selecting a bank for proximity, family tradition, or effective advertising, you can save money by knowing your banking options, how banks function, what practices will incur unnecessary expense, and what practices will help you save money. Your choices boil down to the following:

• Local banks: These offer the advantage of letting you build a relationship with your banker. They may charge higher fees, but they may also be quicker to handle mistakes or to acquire loans.

National banks:Fees, including ATM charges, may be lower, but these banks may also make more mistakes that require excessive effort on your part to sort them out.

• Savings and loans: These may offer higher interest rates and loan accessibility, but they may not be as flexible on checking services.

• Credit unions: Membership usually requires an affiliation with other credit union members (such as a Chevron credit union for Chevron employees). Credit unions are owned and controlled by the people who use them, as nonprofit organizations. You can find credit unions at www.creditunion.com. Because they’re nonprofit groups, credit unions can offer rates and loan terms more favorable than those offered through other banks.

The types of accounts available include the following:

• Basic checking: This type of account is used only for bill paying and daily expenses (earns no interest).

• Interest-bearing checking: If you can stash and maintain a $1,000 balance, this might be a better option. These accounts pay interest but usually require a minimum balance to offset charges.

• Basic savings: Shop for competitive rates and services such as overdraft protection or automatic deposits.

• Money market: This type of account combines checking, savings, and investment funds. They usually require a healthy deposit to open, but they may also provide free checks and pay interest.

• Express: These accounts can be useful if you use ATM, Internet, or phone for access or to pay bills.

• Lifeline: These accounts usually have restricted check writing and are aimed for the low-income customer.

Rather than choosing a bank because you recognize the name and think thousands of branches throughout the country (and world) give them more credence, or because it’s where your family has always banked, a savvy woman will shop for banking services with the same diligence she uses when shopping for clothing and shoes.