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3 Tips for Deciding What Type of Checking Account is Best for You

3 Tips for Deciding What Type of Checking Account Is Best for You

Receive any checking account offers recently? If your mail box is typical, you receive weekly enticements to switch checking accounts from providers who offer good sums of cash or prizes. It seems that the days of offering glassware sets and toasters are gone and financial institutions now catch the public’s attention by flashing impressive amounts of cash. These offers can appear quite appealing until you read the fine print that reveals an often confusing maze of conditions and actions required to realize a full payout of the incentive. So when the time comes to look for a new checking account, how do you navigate the many offers to determine the best account for you? Here are some tips:

1. Decide what you want or need from a checking account

There are all kinds of bells and whistles available from checking accounts today so it is important to know what you would like to have and what you absolutely must have from the financial institution.

Still using paper checks? Want a full suite of services available through online banking? Enjoy the convenience of local ATM access and mobile deposits? Then include those as part of your shopping list. Another consideration is whether you want a brick-and-mortar branch you can visit. Online and remote services have permanently changed the face of banking as you are no longer required to have a bank on every corner to service your needs. However, many people prefer to have a local professional available to answer questions rather than waiting endlessly on hold when using the phone to make contact.

Another consideration is the ability of the financial institution to meet all of your future needs. There is something to be said for establishing a relationship with a local financial service provider. If you trust them with holding your hard earned funds in a checking account, then they should also be considered a valuable source to meet other financial needs like car loans, credit cards, mortgages and health savings accounts. There are a lot of advantages to this approach and many intuitions offer benefits to people holding multiple accounts, such as loan discounts, bumps on CD rates, and waiving of account fees.

2. Understand the requirements and features of the accounts you are considering

It sounds simple, but it is important to understand what different accounts have to offer. Thanks to the increased regulatory burden on financial institutions, free checking accounts have disappeared from many product lineups. Most products now have fees associated with them. Many shoppers will be scared off by the “fee” word. However, having a relationship with your financial institution can really pay off. Many will waive the monthly account fee in return for you meeting different requirements. These can range from having some type of loan relationship with an institution to maintaining a minimum balance. That’s why you should consider your habits when making a decision, but be hesitant to jump into an account with the hope that you will change your current savings, borrowing or spending practices. For example, do you typically keep a balance of $1,000 in your account for emergencies? If so, an account that waives the monthly fee in exchange for a minimum balance of $1,000 makes sense for you.

Even easier can be the waiver of fees for a loan relationship. Many people have car loans or mortgages on their homes. So building a relationship with a local financial institute by refinancing those loans with them can not only offer an interest savings, but can help you waive any monthly fees that are typically charged on the checking account that you are contemplating.

Other considerations when reviewing accounts include any type of transaction limitations, the availability of branches or ATMs, and the various online or remote options available to conduct your transactions.

A well-equipped eCommerce system can help you do most of your banking remotely on your own terms, like 24/7 access to account transfers and bill payment systems.  Many people love the ability to transfer funds instantly to their kids in college.

3. Look for the benefits that you will enjoy the most

Now for the fun part – reviewing what kinds of perks are being offered for the accounts. By comparing account options you can still find programs that offer free checks, loan discounts, and bump-ups on deposit rates. A careful review of various account options may uncover additional pleasant surprises. We have all become accustomed to getting something back for using our credit cards, whether it is cash, travel miles, or gift cards. But what about our checking accounts? Some institutions still offer rewards for debit card transactions. Imagine earning perks for just performing your regular monthly transactions. Pay the phone or cable bill through your debit card and earn points that can later be redeemed for gift cards. Pay your medical bills and then redeem the points for cash. It is amazing how fast these rewards can grow as you pay monthly bills that you would normally pay anyway.

So, the next time one of the shiny checking account ads catches your eye, or you find yourself thinking it’s a good time to find a new home for your hard-earned cash, be sure to do your homework. Have a good idea of what you want your checking account to do for you and then find an account that does it. Always keep in mind your future needs and make sure they can be met through a relationship with the new financial institution. Most important, enjoy the perks the new account provides you whether it is a better than average interest rate, loan discounts, or a rewards program that invites you to choose from an array of goodies.

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