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Top 7 Points While Picking A Bank
Switching banks? Cost, location and needs will help you pick a new one. Take a look.
1. Look For the FDIC Logo
Having an account backed by the Federal Deposit Insurance Corp. or the similar agency that insures credit union deposits protects you from losing money in a bank failure. Individuals can keep up to $250,000 in an account and have it fully insured.
2. Plain or Fancy?
If all you want is an account that allows for basic checking, bill pay, ATM access and a debit card, basic no-interest checking is the least costly way to go. But increasingly banks are starting to require minimum balances (in the range of $1,000 to $1,500) to avoid monthly service charges or per-item fees, such as 25 cents to $1 per check when you write more than 10 checks a month. The average minimum deposit to open a basic account is $68.
3. Take Advantage of Incentives
Many banks pay a small amount, say $35, for new customers who sign up for services like direct deposit of payroll checks or online bill pay. Both direct deposit and online bill pay are also ways to avoid monthly account fees because some banks require them to qualify for the fee to be waived.
4. You Have to Pay For More
Interest-bearing checking accounts on average require a $3,400 minimum balance, according to Bankrate, and it takes an average minimum deposit of $473 to open one. Monthly service charges for dipping below the minimum balance were an average of $12.55 last year, a record high.
5. Location, Location, Location
The old saying in real estate goes for banking, too. Suburban commuters and frequent travelers need banks with lots of branches and ATMs scattered over a wide geography. This is especially vital to avoiding fees banks charge for using other banks' ATMs.
6. Beware ATM Fees
Survey after survey names ATM surcharges as the bank fee that angers consumers the most. Last year, the average fee banks charged non-customers for using their ATMs rose 12% to more than $2, according to Bankrate.com. Your own bank is going to charge you, too--an average of $1.32 for using another bank's ATM. To avoid these fees, pick a bank that has a lot of its own ATMs and stick to those machines only.
7. Watch Your Balance
Last year, banks raked in $40 billion in checking overdraft fees, one-time charges that average $27 for each bounced check or debit overdraft charge, but can be as high as $35 an item. One way to avoid overdrawing your account is to sign up for e-mail or mobile text alerts from your bank to notify you of a low account balance. Most banks still offer this service for free.
Top 7 Most Powerful Personality In Finance
The seat of power over the next three-to-five years will be located in Washington, D.C., and not in New York City. It will rest in the public sector, not the private sector. "Power" ultimately boils down to who makes the decisions, and decision-making has clearly shifted from private industry to government. Given that it is clear to me that real power is out of the hands of the private market, I have chosen not one private-sector player on this year's power list.
1: Ben Bernanke
Chairman, United States Federal Reserve
As the Chairman of the Federal Reserve, Bernanke holds the ultimate power as he will manage the "exit" strategy from unprecedented government support of asset values, real estate and otherwise. One wrong move and we could face an asset price collapse.
2: Tim Geithner
Secretary of Treasury, United States of America
As U.S. Treasury secretary, Geithner is taking a leading role on policy and regulatory change. He will help set the standard on which concerns are too big to fail
3: Sheila Bair
Chairwoman, Federal Deposit Insurance Corp. (FDIC)
Increasing the federal bank deposit insurance limit from $100,000 to $250,000 in 2008 was one of the best policy decisions during the crisis. Bair holds the cards to determine the pace of bank failures and the participants who will shape the future of the regional banking landscape.
5: Lawrence "Larry" Summers
Director, White House National Economic Council
Summers has the ear of President Obama and is the behind-the-scenes voice for the White House in policy planning and decision-making.
4: Elizabeth Warren
Chairwoman, United States Congressional Oversight Panel
As Chair of the Congressional Oversight Panel, Warren audits the implementation of the $700 billion Troubled Assets Relief Program. Warren will play an increasingly important role in auditing the financial markets and the regulatory system, especially as the Treasury programs evolve.
6: Barney Frank
Chairman, United States House Committee on Financial Services
As chairman of the House Financial Services Committee, Frank has played an instrumental role in the government's policies during the crisis. He is currently working on the Consumer Financial Protection Agency legislation, which could transform the consumer regulatory environment as we know it for mortgages, credit cards, auto loans and more.
7: Chris Dodd
Chairman, United States Senate Committee on Banking, Housing and Urban Affairs
Dodd will continue to have critical influence on the future legislation of banking, credit cards, financial markets and housing. Current issues include freezing credit card interest rates, reining in overdraft fees charged by banks and extending the new home buyer tax credit.