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Things You Should Consider When Opening a Checking Account

Nov 18th 2013 at 10:11 AM

Everyone opens a checking account at a certain point in their lives. Checking accounts allow you to write checks to access your funds. A checking account is a convenient way to pay bills and is safer than carrying cash. You can find many options for free checking. Sometimes, these types of accounts require a minimum balance or will charge fees for certain transactions.

When choosing a bank or credit union to keep your money, there are some factors to take into consideration. Whether you are just opening your first checking account or are thinking of switching banks, here are seven questions to ask yourself.

Will my funds be secure?

Always make sure that your financial institution is insured by the Federal Deposit Insurance Corporation (for banks) or the National Credit Union Association (for credit unions). Don’t use a bank or credit union otherwise. The FDIC protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. The National Credit Union Association does the same for credit unions.

What fees will I have to pay?

Find a bank that doesn’t charge you any fees for basic account transactions. Such examples include per check fees and fees for account assistance. Furthermore, if you use ATMs frequently, pick a bank that doesn’t charge for ATM usage.

Will I have to maintain a minimum balance?

Some types of accounts require you to maintain a minimum balance before they begin charging account fees. Make sure you will be able to afford it before making a decision.

How about interest rates?

Look for an account that pays higher-than-average interest on your deposits and charges lower-than-average interest on your debts. That’s the ideal combination you should look for.

Will I be able to transfer funds online?

Make sure your bank and account will process online transactions quickly. Also, check if there are any fees for online banking. Many financial institutions don’t charge you for paying a bill online, for instance.

Should my bank have a physical location nearby?

It depends. Choose a bank that best suits your needs. Some people aren’t comfortable with a bank that doesn’t have a physical location near their home or workplace; others don’t find this aspect very important. If you plan on depositing cash fairly often, take this into consideration.

If you pay attention to your banking habits and needs, you will find a financial institution you can trust. Do your research beforehand so you can pick the best option available.

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