What other sorts of things do you need to ask about? A bank’s services! Again, not all banks are the same. Check into the following factors:2. Evaluate Account Options
What are the account fees? Some banks charge fees on accounts; others charge fees only if balances (the amount of money in the account) fall below a certain level. Always find out what the fees are.
In addition, banks can charge fees for services such as ATMs and overdrafts. (An overdraft is writing a check for more than you have in your account). Again, find out what the fees are and compare them. If ATM fees exist, are they waived for any specific ATMS (such as those at the bank’s branches or in specific locations)? How much is the overdraft fee?
Find out what the minimum balance requirement is. Many banks require a minimum amount, but some don’t, especially for younger people. Do the fees vary by amount in the account?
What is the current interest rate? Does the bank offer interest rates on its checking accounts? Some do, at least on qualifying accounts. Find out if there is a minimum or other requirements for interest-bearing checking and what the interest rate is.
All savings accounts have an interest rate. If you are planning on opening a savings account or may in the future, you need to know what interest the bank pays. Is the interest rate variable by the amount in the account? Find out and what the various amounts are.
What account services does the bank offer? Banks also vary in the services they offer customers. Some, for example, offer online bill pay. Paying bills online can be a major convenience, ensuring that you no longer have to stamp and mail bills or worry about missing a due date. Some offer direct deposit. Direct deposit of your paycheck can also provide major convenience and streamline your cash flow.
Others offer low balance reports or alerts, so you can manage your accounts effectively.
Some banks (like CBC Bank) also offer accounts tailored to life stages. Students, for example, need convenient and on-the-go services, such as online and mobile phone options and debit cards that can be used to access cash anywhere. People over 50 may want investment advisory services and options such as safe deposit boxes to keep important documents secure.
What is the best account for you? Spend some time considering whether you want to open a personal checking account, a savings account, or both. They serve different functions in your financial life. If you are a small business owner or proprietor, consider whether you want a business checking or business savings account.
A personal checking account allows you to manage your money on a day-to-day basis, to pay bills regularly and to withdraw money when you need it. It’s a place for your paychecks or other income to be deposited. Checking accounts are the site of most people’s daily and monthly cash flow.
A personal savings account, on the other hand, is generally money put away for, yes, savings! Reserving three to six months’ of income into a savings account is a smart financial plan in case of an emergency. An emergency fund is just what it sounds like – money to tide you over in case of an illness, job loss, or an unexpected bill.
But many people also put money in a savings account for a specific purpose. If you’re saving for a house down payment, for example, you can sock the money away into a savings account. Other people save for holiday gift-giving or other purposes.
In all cases, money in a savings account earns interest. Having a separate account for a specific purpose can also work against the possibility that you’ll spend the money rather than saving it.
If you run a small business, the checking account is the daily and monthly lifeblood of paying your expenses and your employees. The savings account can be used to manage your cash flow and even as future collateral for a small business loan.
