Get to Know Checking Accounts

It is important to know about the various kinds of checking accounts that are available to you. It is even more important to be aware of the various fee structures associated with them.

First I recommend that you look at a few internet sites where you can find general information about checking accounts. Look at educational sites first. Later you might look at bank sites.

Banks and other financial institutions offer materials that can be very informative but often they omit important information that might influence you away from their options. For that reason you will be better served by beginning with something like:

Financial Focus: Personal Checking Accounts, an article from PennState

and/or

Checking Accounts: Finding the Right Balance, an article on the FDIC site.

Then visit several banks in your communtiy and collect specific information about their various accounts.

Remember, they are in business to make money. It is very likely that you will first be directed to accounts that have lots of features along with related fees.

Get information on all their offerings. You will find that many banks have accounts that have no fees attached. You will likely be surprised at the variety of accounts found within individual banks. You will also likely be surprised at how expensive some banks are compared to others.

What is right for you today may not be the best next year or the year after. For example, many accounts have minimum balances to avoid fees. You may need to have an account that requires no balance today to avoid that fee. A few months from now it may be easy to maintain a $250.00 balance on an account that offers free checks.

And next year you may want to switch to one that requires a $500.00 balance but pays interest. Or again, you may find that when you turn fifty your bank will offer you a senior account that provides for free what before required a monthly fee.

A particularly good option that should be looked for comes from linking accounts. For example, by maintaining a minimum savings account in a bank you may be able to guarantee interest on your checking account with no fees or minimums.

At the same time the bank may automatically transfer money to your checking account in the event of an error on your part that would otherwise result in an overdraft and subsequent charges, often incredibly high ones.

Even with this information at hand, many people fail to make good use of what they know. Why is this? Primarily because of the natural human avoidance of change.

But of course you know that your financial situation is in a constant stream of change. You can only become successful with money when you are motivated to make changes regularly and quickly when necessary.

Just remember that banks are also businesses. A very large part of their profit is selling services for which they collect fees. You can lose a lot of money paying for services that you don't need.

Many people do just that without even knowing about it. This is especially true with their checking accounts. Don't be one of them. Avoid the pitfalls, but profit from the opportunities.