Shopping Around

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Whether you choose a bank, credit union or a combination of both, make sure it’s an educated decision. Not all institutions offer the same services. Here are a few you might want to inquire about.

Checking and savings accounts

A checking account is designed for frequent deposits, including direct deposits of your paycheck, and withdrawals to help you pay for your daily expenses. A savings account is designed for you to deposit money frequently, but withdraw money less frequently. Both savings and checking accounts can offer interest earnings and both can charge you fees. Be sure you’re getting the best deal.

Loans and Mortgages

Most financial institutions offer a range of loan products in addition to checking and savings accounts. These could be general loans, small-business loans, home-equity loans, car loans and home loans. A good relationship with a bank or credit union can lead to lower interest rates on new loans.

Other services

Financial institutions offer many other miscellaneous services that may impact your decision to become a customer. Some offer holiday clubs that help you save for gift-giving holidays. Others offer credit repair services to help you get your credit back on track. Be sure to ask about all the services a company offers before you make your choice.

Products offered by banks and credit unions have different policies for account requirements, charges and fees, such as the ones listed below.

Minimum balances.

Some institutions may require you to keep a minimum amount in your account, such as $100. If your balance falls below the minimum amount, the bank will charge a small fee or close your account within a certain time period.

Annual or monthly fees.

Some institutions may charge you a fee just for housing your account.

Insufficient funds charge.

If you bounce a check—meaning you’ve written a check that exceeds the balance in your account—some financial institutions will allow the check to clear and charge you an insufficient funds fee, usually $15 to $30 per check! The same holds true if you use your debit card to make a purchase and don’t have enough money to cover the transaction. These fees can quickly add up, but they’re easy to avoid if you keep tabs on your checking account balance. You can also avoid these fees by opting out of overdraft protection with your bank. This means that the bank will not cover your expense if you don’t have the money in your checking account and your transaction will be declined. You may suffer embarrassment at the time of your purchase, but you will not incur fees from your bank.

ATM fees.

If you use an ATM that’s owned by your financial institution, there may be no cost. However, if you use an ATM that isn’t owned by your bank, you may be charged a service fee, and your bank may charge an additional fee for using a machine outside the network.

If you’re looking for a financial institution, check out our Finding a Financial Institution worksheet to help you list the pros and cons of each option.

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