Jun 19, 2018 / Money Tips
It’s nice not to have to carry a bag of coins around to conduct business. But that service shouldn’t be taken lightly. Opening a checking account means starting a relationship with your bank or credit union and the services offered aren’t always equal. Here are 7 things you should consider before opening a checking account.
The ATM is your remote bank teller on the go. Learn where the no-fee ATMs are, including both those that belong to your financial institution and those within a courtesy network. Do the first-party and courtesy ATMs offer different services? What fees will you pay if you need to use an ATM outside the network? Are there ways to avoid them? How far afield can you find no-fee ATMs? Is your institution in a network that you can use when you’re traveling out of the area.
For those services that go beyond a checking account—such as loans, cashier’s checks, notary, and so on—you want to have convenient physical branches. Ideally, you should be able to identify a branch near your home or the area where you typically do other errands. It’s great to have one near work, and if there’s a decent distribution around the larger area, you’ll be glad when you’re, say, shopping for a car in a neighborhood you don’t usually frequent.
The more financial business you can conduct without going to a branch or ATM, the better. Learn how your institution will let you access your checking account remotely to pay bills, make deposits, transfer funds, view balances, and so on. Take a tour of the app you’ll use and what it can do. Ensure your bank or credit union will make it easy for you to automate your bill paying, as well, and make sure you know what services will require you to pay a fee.
Policies vary, so don’t make any assumptions about fees as your savings or checking account balances go down or up. Make sure you have a written schedule of fees and benefits for maintaining certain balances.
Learn what fees you’ll be charged for services provided. There are bound to be services that you’ll never use, so having a choice between different types of counts and paying attention to their association fees can save you money in the long run.
Whether it’s a miscommunication between holders of a joint checking account, a check written long ago that finally got cashed, or a simple mistake, overdrafts happen. Generally, the purchase is declined unless you’ve arranged for overdraft protection, which can save embarrassment and another trip to the store. Look into overdraft options, including the amount of fees that are charged before choosing a checking account.
Research how much interest you’ll earn on your account and whether you have to maintain a minimum balance. Ask about rates for savings accounts and what the limitations are for the number of withdrawals. Although your checking account is likely to see the most activity, you can help yourself with money management by using savings accounts to accumulate money for taxes, semiannual insurance premiums, or other infrequent bills. And it’s nice if that idle money can also earn a little as it grows.
From a bag of coins to automatic bill pay and remote check deposit, paying for life has only gotten easier, especially when you find the financial partner that offers exactly what you need.