Banks are everywhere, they are one of the many backbones supporting the economy and deliver a crucial service to the public. Deciding on a bank could be difficult since there are so many around us. According to the Federal Deposit Insurance Corporation (FDIC), there were 6,799 FDIC-insured commercial banks in the United States as of Feb. 11, 2014. The FDIC will insure your deposited money up to $250,000. While, some banks are not even insured by the FDIC.
However, with depositing money into an account comes great responsibility. It varies on the banking branch, but every bank has their own fees or fine print that some people overlook. This guide will help you to evade deductions, inform you on banking alternatives and what some benefits are that banks offer.
What to avoid:
- Maintenance fees. According to Business Insider, “Bank of America, Wells Fargo, Chase and many other major banks now charge a monthly fee if your checking account falls below $1,500, but you may able to waive these fee by setting up direct deposit.”
- Overdraft fees. It is one of the most common fees that people get charged for. There is a way of evading it, just by simply telling your bank that you don’t want to be a part of the overdraft program. The other choice is to setup an overdraft transfers on your account. This will allow the bank to take money from another account. It could take money from your savings or charge it to your credit card.
- Do not over-purchase and blow through paychecks or your salary. Banks have your transaction records and analyze them. They could be giving you an unfavorable interest rate based off of your transaction history.
- Automated Teller Machine (ATM) fees. There is a fee if you do not use an ATM that is provided by your bank. The fee fluctuates on the ATM that you are using. There will be a substantial amount of money missing from your account over time if you are constantly using ATMs that are not your banks.
- Some banks fail to mention that their business checking can still have hidden restrictions. Depending on how well your business operates you may be charged with a fee. According to NerdWallet, you can face a fee up to $0.75 per transaction or per $100 cash deposited over the set limit.
- Branch withdrawal fee. Saving2Invest stated, you may be charged $5 to $10 for going inside the bank to make a deposit or withdrawal.
7. According to the Insurance Information Institute, “The 2015 Identity Fraud Study, released by Javelin Strategy & Research, found that $16 billion was stolen from 12.7 million U.S. consumers in 2014, compared with $18 billion and 13.1 million victims a year earlier.”
Be careful what website you use your debit or credit card on. The websites you use should have a secure checkout. If your card information manages to get into the wrong hands, your bank will contact you if they notice any suspicious activity occurring in your account. They will also additionally refund you for the purchases that you didn’t make and will issue you a new card.
Brick-and-mortar bank’s benefits:
- Chase gives $200 to new customers that sign-up for a direct deposit account. This perk alone can be tempting to some and convince them to get a direct deposit account there.
- The customer service that is provided by banking professionals. Online-banking only has phone customer assistance.
- By going to a regular bank weekly or however often. The employees and bank manager will know who you are. It could increase the chances of you getting a loan in the future.
- Most traditional banks offer online services similar to those of the online-only banking.
- The various financial services that brick-and-mortar banks provide exceed the capabilities of an online bank.
- The Federal Deposit Insurance Corporation (FDIC) protects your bank accounts deposits up to $250,000 for each depositor at each insured bank.
- Its more personal, you get to walk-in and are greeted by a teller or employee that will assist you.
If you are not enticed on traditional banks or are not satisfied with their provision, then there are alternatives. You could choose to give your money to a credit union instead. They are similar to banks, however, the main difference is that they are nonprofit and are owned by their members. Unlike credit unions, banks are controlled by shareholders. They also do not have as good as interest rates as credit unions and the pleasure of having numerous free of charge ATMs.
Online banking is also a possible option that might provide you with the banking needs that you’re looking for. Business Insider stated, that online banks have relatively high interest rates, excellent customer service, low fees and the added bonus of 24/7 access to your bank account.
It varies at the traditional bank, but a requirement is to have around $4,500 in your savings account to not get a monthly fee. Online banks necessitate $350 in your savings account to be granted acceptable and have greater interest rates than brick-and-mortar banks. Although, by banking online you lose the human contact experience and your account security could be jeopardized. According to TIME in 2011, approximately 360,000 Citibank credit cards were compromised by a security breach, about 80 percent more than were initially suggested.
It is a very significant choice to decide where to store your hard-earned money. There are various financial organizations where you can deposit your money. They will all have their own incentives to persuade you to choose them. It is a matter of, if you understand what comes with the enduring commitment. The fees, the services, the interest rates, convenience and so on. This all comes into consideration when you decide on a reliable credit union or bank to capitalize on.
Jonathan Sanzari is a contributing writer & copy editor with Meadowlands USA. He has an associate degree in arts from Passaic County Community College and a bachelor’s degree from Ramapo College of New Jersey in communication arts, focusing in journalism. He can be reached at firstname.lastname@example.org.