Ok, so maybe not everyone, but these are the products that will determine whether or not your relationship with your financial institution is a success.
Maybe you’re looking for your first bank account. Maybe you’re tired of your current financial institution and you are looking to make a change. Take the time to shop around; it will be worth it in the long run. Look at large national banks, community banks and local credit unions as they all have much to offer, with varying rates, fees, product features and convenience. Look for these 10 basic tools to manage your money and your budget, and to keep your funds secure.
At a minimum, having a savings account gets the cash out of your pocket. Funds are insured and cash in a savings account is more secure than cash hidden in your freezer. You can set aside emergency funds, college savings, or save for large ticket items—and earn some interest, too. Yes, today rates are low. I earned all of $.15 last year on my holiday account—but I did have $1400.00 saved up for gifts at the end of the year.
Not all savings accounts are alike. Compare interest rates, but more importantly, check to see if there are any fees. If there are minimum balance fees, monthly fees or ATM fees, they will eat up your savings fast. Check interest terms, too; some institutions will require a minimum balance to earn anything.
Again, more secure than carrying cash and you have a paper trail for budgeting.
Checking accounts can be a huge revenue source for some financial institutions, so be sure to read the fine print. Read the disclosures or ask the banker for overdraft policies, details on the order that transactions are posted, and fees, fees, fees—look at monthly fees, minimum balance fees, and account requirements to avoid fees. Not all financial institutions charge fees. Look for the checking account that best fits your financial situation.
A debit card takes the place of checks. It allows you to make purchases at merchants or online, and to access cash through an ATM.
Each year, the financial industry earns billions of dollars in debit card fees. The easiest way to avoid them is to not opt-in to any courtesy pay products.
Sign up with your employer to have your paycheck deposited directly into your checking account. The automatic payment saves a trip to the bank and will generally post before they open. Many employers will also allow a split deposit meaning that you may deposit a portion to savings as well.
Many checking accounts will require direct deposit to avoid a monthly fee. If your employer does not offer direct deposit, choose a checking account that does not require it.
E-statements are a great security feature and a great way to stay green. Email notifies you that your statement is available. There is no confidential information in your mailbox—simply an email notification that you can go to online banking and review your statement or print it out.
Again, some accounts may require e-statements to avoid a monthly fee. If you don’t have regular access to a computer and/or printer, make sure this is not a requirement of your account.
Overdraft Protection is a line of credit that will cover transactions if there is not enough money in your checking account. Some institutions will transfer funds from your savings account to cover checking transactions, too. Before enrolling, look at the interest rate and whether there are monthly fees or transaction fees.
Online banking allows you to monitor your account online 24/7, transfer funds between accounts, print check copies, make loan payments, apply for loans and send secure messages to your financial institution. Look for the option to set up email alerts to let you know if your account hits a low balance, if transactions come through, or if payments are coming due.
In addition to most of the online banking features, mobile banking enables you to deposit checks via your phone and create text alerts—and there is even an app that allows you to control how and when your debit and credit cards are used.
Using an online bill pay service allows you to make one-time payments or set up automatic payments, saving the cost of checks and stamps. Depending on the service you use, some merchants make their bills available to view as well. Costs vary from free to $6.00 per month. Some programs will have a per transaction charge.
Credit cards are traditionally used to break up the cost of a large purchase (make payments rather than paying all at once), for emergency purchases or for convenience. Today, everyone should have a credit card for enhanced security for online purchases, vacation purchases and to establish and maintain a credit score. Your credit score determines loan rates, auto insurance rates and can affect the decision when leasing an apartment. Rates, fees and default terms will determine which card will work for you. Look for annual or monthly fees, late fees and grace period information. Reward points may be a factor to consider as well, but make sure that you understand the conditions and requirements first.
The perfect account for you will have the right mix of features and benefits without additional charges. Take a realistic look at your spending habits and determine which benefits and features are essential for you. Make a list and go shopping. Find the account that provides you all of the services you need and provides them for free.
For more information on financial products, visit www.westerracu.com/personal-banking/manage-checking.
This post was written by Chris Hardenberger, a branch manager at Westerra Credit Union. If you’d like to submit a guest post, email us at firstname.lastname@example.org.