The Federal Deposit Insurance Corporation (FDIC) Consumer News Summer 2016 has just been released, and your BBB® would like to pass on some of the tips it contains on choosing and using the right bank account.
The FDIC article offers these tips before you open an account:
Think about how you handle your money:
- Are you on a fixed income or does the amount and frequency of your income vary?
- Do you pay for purchases with cash, credit cards, debit cards, checks, or online?
- Are you concerned about overdraft fees?
Compare bank products and services:
- What fees do they charge?
- What interest rates do they offer?
- Do they have a minimum balance requirement?
- Are there monthly maintenance fees?
According to the FDIC article, federal rules require certain information to be disclosed to consumers before opening an account. Read the bank account’s terms and conditions carefully to make sure you understand potential fees and when they may be assessed.
The FDIC article offers these tips after you open an account.
Follow your transactions and balance your account:
- Whether you use pen and paper, a check register, a computer spreadsheet, a website, or an app, the key is to track every transaction—deposit, check, ATM, debit card transaction, online bill payment, etc.
- Take advantage of a bank service that provides an alert when your account balance drops below a certain level.
Learn how to avoid overdraft fees
- If you open a checking account, make sure you understand the fees for being overdrawn. Most banks offer overdraft protection, but it comes with fees as high as $35 per item.
- Decide whether or not you want to opt in (agree) to overdraft coverage. Senior Consumer Affairs Specialist at FDIC, Heather St. Germain, advises consumers to “Think carefully before deciding to opt into this kind of fee-based overdraft program. You could be charged several overdraft fees in a single day because most banks will assess a separate fee for each transaction that exceeds your account balance, so the costs can add up quickly.”
- Consider asking the bank to link your savings account to your checking account to automatically transfer funds when you don’t have enough in your checking account. The bank may charge a fee for this, but it is generally less than an overdraft fee.
Have your pay direct deposited
- You won’t have to worry about getting to your bank to make a deposit.
- You can build up your savings account by having a portion of your pay direct deposited into your savings account.
Investigate ways to earn more interest on your money
- Some banks and credit unions are now paying a higher interest rate on the balance in a customer’s debit account than on the balance in a savings account if the customer meets certain requirements.
Protect your accounts from theft and fraud
- Check your accounts regularly for suspicious charges.
- Don’t give out your account number, password, or PIN to an unknown caller or emailer no matter how legitimate they might sound or look.
For more information you can trust, visit bbb.org/evansville.