Whether you are moving to a new neighbourhood or city, you are tired of your bank’s policies or fee schedules, or you are just looking for additional account benefits, sometimes it makes sense to switch banks. But it can take a bit of time and effort to make the switch (particularly if you are using your current bank’s online bill pay service); so, it is important to make sure you are making the right decision for you and your money, according to a report byhttp://bankingadvice.com.
It is also essential to make sure that you are basing your decision on solid financial reasoning before you go through that time and effort.
Ask the following questions before you switch banks to ensure you are putting your money in the best place possible:
*How large a balance is needed to avoid fees? What is the minimum deposit required to open an account? Is that something that is feasible for you? Does it make sense for your current financial condition? Also look at the minimum balance required to waive monthly account fees. Make sure that the minimum balance is something you can maintain each month. Additionally, some banks require a direct deposit or a recurring payment through their website to avoid monthly service fees. Investigate their requirements and make sure you are willing and able to meet them.
*How much interest is paid on deposit accounts? Does the account pay interest? If so, how much? And again, do you need to maintain a minimum balance to earn interest?
*What fees do they charge? In addition to the monthly service fees, you should check other current account fees like insufficient funds fees, ATM fees, stop-payment fees and account closing fees. Add it up and make sure this potential new bank makes sense for you.
*ATM network? Most banks and credit unions participate in a network of ATMs and machines are readily available and convenient as well as free to use. Yet, it makes sense to make sure there are no ATM fees for using out of network machines, and that the network fits your ATM needs.
*Is there overdraft protection and if so what are the options and the costs? Hopefully you don’t have a need for overdraft protection. However, at some banks the protection is free and it can be a nice convenience. If you do need it, investigate the fees and make sure you understand your options before you change banks.
*How quickly are your deposit funds available? Many banks credit your account instantly when a deposit is made. For some banks, it depends largely on how you make the deposit. For example, it may take 24 hours for your account to be credited if you use the bank’s tellers. However, if you deposit through the ATM, it may be available right away. If you make frequent transactions, it can be helpful to know how long it will take before your funds become available.
*Finally, in regards to incentives and applications, bank rewards programmes and mobile banking are growing trends. If these incentives are important to you, make sure your new bank offers them and doesn’t charge a fee.
Improving your payment system through bank accounts
Transferring/wiring money: If you use a money transfer company to wire money to another person’s account, you will pay a fee, usually a percentage of the amount of the transfer. Depending on the amount you want to transfer, this fee can be expensive. If you wire from your bank account to another person’s account, your bank will usually charge a flat rate that is generally lower than the money transfer company, according tohttp://consumer.westchestergov.com.
- Accessing cash: When you need cash but don’t have a bank account, you may decide to use a credit card to get a cash advance from an ATM. The credit card company will charge you a transaction fee and interest. If you have a bank account and an ATM or debit card, you can access your money from your own bank’s ATM for free. Although you can access your money from any ATM, you will likely pay a transaction fee if you use an ATM other than your bank.
- Bank accounts can help you access credit: Banks can help you access credit to acquire a home, a car, student or personal loan, because banks tend to favour existing customers, particularly those who manage their money well. Plus, going to small loan lenders that lend you cash quickly can be quite expensive, because they charge lending fees and high interest rates.
While bank accounts are preferred, banks will also have fees that you should be aware of: For example, banks will charge you if you use your debit card on an ATM that is not theirs. Also, depending on the type of account you have, you must maintain a minimum balance of a certain amount to avoid being charged. It is always best to shop around for the best product that fits your needs.