Picking the right account for you

Char Telkamp

Char Telkamp

he first thing to consider when looking for a new financial institution, is that checking and saving accounts are not the exclusive domain of banks. Credit Unions are often the better choice.

Credit unions operate much like banks, and deposits are federally insured up to one million dollars by the National Credit Union Share Insurance Fund. The key difference is this: credit unions are nonprofit, member-owned cooperatives whose members share something in common, such as a labor union, college alumni association, employer or community.

Since credit unions return profits to their member’s, interest rates on credit union accounts tend to be higher than at commercial banks, while fees and minimums tend to be lower. But on the other hand, credit union may offer fewer services than a bank and they may have more restricted access to ATMs.

If you have the chance to become a member of a credit union, it would be well worth your time to check it out. To learn whether you are eligible to join a credit union, or to locate a credit union near you, visit the Credit Union National Association or call 1-800-358-5710.

Both banks and credit unions offer several different types of checking and savings accounts: Some pay interest, some don’t. Some offer perks, some don’t. Some are even specially designed for students. They all share one thing in common though. They each have restrictions, fees and opportunities of waive fees if you meet certain requirements. When shopping for a bank, Money magazine recommends you consider the following:


The higher your average balance, the more likely you are to perks, like “free” Checking with interest.


Some no-fee accounts limit the number of checks you may write each month, and charge high fees if you go over the limit.


If you want to direct-deposit your paycheck, ask if that entitles you to free or low-cost checking. If you use ATMs frequently, make sure the bank has plenty of them conveniently located near you. If you use another Bank’s ATM, you might pay $3 or more just for the privilege.


The more relationships you have with our bank, the greater your chance of getting price breaks and perks on its services and products. So if you have a checking and savings account and are signing up for the bank’s credit card or for a loan, be sure to ask if you are entitled to any discounts.

Money magazine also states that you can “beat the fees” by taking a few simple precautions and follow these easy, cost-cutting tips.

Direct deposit your paycheck. If you do, some banks will give you free checking, but you may have to ask for it. (Also, in this part of the country, it makes sense. Your paycheck is electronically sent to your account regardless of the blizzard or anything else, stopping the postman from delivering the mail.)

Buy cheap checks. If you write a large number of checks, it may pay to shop around. Some banks charge as much as $24 for a box of 200 checks. You can get that same number of checks for less by ordering direct from a printer.

Get overdraft protection. It’s usually free to set up. If ever you write a check that exceeds your account balance, overdraft protection automatically covers the extra money needed. You’ll be charged a fee for the service plus a high, credit-card like interest rate for the loan, but in most cases the loan is short term, it’s likely to cost you much less than a bounced check.

Be proactive about asking for discounts. Periodically check with your bank to see if there are better deals for your money.

If you have a debit card, ask for cash. Another way to dodge ATM surcharges is to ask for extra cash when you make a purchase with your bank’s debit card. Just ask the clerk for an extra $20 cash, and you’ll pay no fees in most cases. Check with your bank to make sure. If your bank is one of the minority that charges a fee, be more cautious with the cards use – or get a new bank that doesn’t charge for debits.

Find out what “free” means. Check exactly what the bank’s requirements are when opening the account. Does the bank require a certain balance maintained? A limit on the number of checks written? Know what you are agreeing to before agreeing.

One area where you can reduce the amount of time spent balancing a checkbook, transferring money and paying bills is by Online Banking.

“More than 20 percent of U.S. households already perform banking transactions online,” said “Money” magazine. “By 2006, half of all banking households will bank online.”

But the service usually comes with a price. This is one area that should be closely looked at before starting. Will you save money after paying the fees?

There are benefits, you can set up monthly payments to be sent out each month for a set dollar amount, like to pay the rent, or a car loan, or insurance. It can cut down on the amount of bills cluttering up your desk and the amount of stamps you use.

Overall, picking a bank or credit union is based on personal choice and common sense. Read the agreements and requirement statements that the bank has for the service you’re looking into.

If you don’t understand something ask. That’s what they’re there for, to answer any questions and to provide you with the needed information.

It may all come down to which bank gives the best customer service.