Intro To Finding A Good Bank

If you’re thinking of opening a new bank account and you don’t want to get screwed over on fees and service like last time, here are some important questions to ask the bank before signing up.

Is there a minimum deposit requirement?
Are there limits on the number of withdrawals? Are there penalties for going over?
How much interest is paid and when? (Compare rates in your area at Bankrate.com)
Are deposits protected by the FDIC? Or, if a credit union, from the NCUA?
Are there tellers and ATMs nearby where you work and live? Are direct deposits and electronic transfers enabled?

If a checking account, be sure to also ask:

Are there minimum or maximums check amounts?
Is there a monthly checking account fee? A fee per check?
How long is the hold time for cashing checks?
What’s the overdraft policy?

If you don’t ask, they just might forget to telll you until you’re whalloped with fees.

Comments

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  1. homerjay says:

    Heres a good question:
    Are you a credit union?
    If the answer is no, walk away.

  2. tz says:

    Also ATM fees – which network, what are the fees for each kind of transaction (e.g. my credit union gives 5 free withdrawls).

  3. timmus says:

    I predict this type of response… and it would be a warning flag.

    Are there minimum or maximums check amounts?
    “Normally it’s ___”

    Is there a monthly checking account fee? A fee per check?
    “It depends… typically ___”

    How long is the hold time for cashing checks?
    “Generally about ___”

    What’s the overdraft policy?
    “Usually we do a ___”

    I believe the banks usually hand out a big packet with the service terms… hopefully the representative is sharp enough to go over it with you.

  4. Wet_Baloney says:

    If you do any overseas travel or conduct business with foreign companies, you might also want to ask them about issues related to exchange rates and fees they charge for things like paying Euro denominated purchases.

  5. Homer Jay, you stole my comment!

  6. spanky says:

    In what order do they process checks and other withdrawals from the same business day? I think most places still process in the order in which they’re received, but some do it from largest to smallest, so they can maximize potential overdraft fees. Bank of America was sued for this a few years ago.

    Not that anyone should plan to overdraw their account. But any bank that would actually have such a dastardly policy is bound to have all kinds of other nefarious tricks up their sleeve, too.

    Also: Credit unions thirded. I can’t think of any reason to do use banks at all if you have access to a credit union.

  7. tedonion says:

    I agree with Homer 110%!

    Other Fees to watch out for:
    No direct deposit fees
    Direct deposit fees
    Direct deposit on the wrong day fees
    Not enough direct deposit fees
    Inactivity fees
    (can you not have overdraft protection please?)
    Talking to a human fees
    Calling the company fees
    Using a teller fees
    Using an ATM fees
    Not using the ATM enough fees
    Pen surcharges
    Fees associated with lost / stolen cards
    Standard Overcharge Fee (SOF)

    And my favorite fee, the you didn’t pay enought fees fee!

    Yea, the bank will own you.

  8. Triteon says:

    I have but one problem with the credit unions in my area: I use the ATM quite a bit (part of that whole if-you-don’t-have-money-then-don’t-buy-stuff-you-don’t-need practice) and none of the CU’s at home have ATMs near where I work.

  9. jitrobug says:

    I switched from US Bank to a credit union and I’ve been really happy with them – I have a fun story from after the switch.

    I was buying a house and needed to get bank records for the previous year showing that I’d paid rent, I hadn’t saved them, so I went in to a US Bank branch. It took a little time, but a friendly teller was able to find and print them all for me. Of course, I also needed to pay for them (fees!) – and they could only accept cash, so I had to use the ATM outside. When I came back in and the manager told me that I needed to have exact change.

    “Oh, ok, I’ll go somewhere and get change… is there a bank around here?”

  10. Ishmael says:

    Why do we love credit unions so much? What’s their bonus over a regular bank?

  11. Gesualdo says:

    Ishmael: In my experience credit unions are most interest in serving their members (the customer), while banks are most interested in serving their stockholders.

    Credit Unions are non-profit organizations owned and controlled by the members. Usually there is some sort of restriction about who can join a particular Credit Union (State Employees, Farm Workers, Teachers, or some other distinction).

    Obviously, banks pretty much hate credit unions since their non-profit status gives them some big savings on taxes which helps them pass superior service on to their members.

    What I want to know is why we don’t have more non-profit organizations in industries where serving the consumer should be more important than serving the shareholders. Specifically, it seems to me that insurance (health and property) and pharmaceutical companies would be much more effective at serving people if they weren’t so worried about EPS and market cap.

  12. are you a wells fargo bank?

    if yes, go anywhere else.

  13. homerjay says:

    Gesualdo is giving a high-level view of credit unions.
    At a local level the service is top notch and there are virtuall no fees that I have seen. In fact, for those ATM’s that aren’t part of the SUM network (and therefore charge a fee) DCU (my credit union) credits me back up to $5.00 per month. Thats actually a lot.

    The closest branch to me is two town over but many many credit unions also part of a network called “Credit Union Service Centers” where I can go to other credit unions and be able to do most of my transactions with their tellers.

    I have never had a single problem with them in the 10 years I’ve been with them and in my experience in dealing with other credit unions in the network to process transactions, the same holds true across the board.

  14. Martin says:

    My experience is that the local credit unions are nowhere near as good as an online bank. Even better are the brokerage accounts that act like checking accounts, except they give money market interest rates on your checking balances (right now, almost 5% – sometimes more).

    Many of the internet banks and brokerages will give you ATM surcharge rebates, meaning that every ATM is free. One gives free Federal Express deposit envelopes. Several others have a deal with the UPS Store that lets you make deposits there. One is now allowing people to make deposits by simply scanning both sides of your check and e-mailing it to them. Most also support online ACH transfers, which allows you to make deposits at a local bank and them transfer the funds from your local bank to your online account as soon as they clear. Most give free checks for life.

    Name a single credit union that does all of that!

  15. homerjay says:

    Well, if you’re talking about three things- free ATM surcharge rebates, varied deposit options (how many do you really need?) and free checks for life, mine does- DCU.

  16. homerjay says:

    By the way, Whats an ‘internet bank?’

  17. Martin says:

    Homerjay:

    An internet bank is any one of the following:

    http://www.nbank.com
    http://www.ebank.net
    http://www.netbank.com
    http://www.everbank.com

    Online brokers that offer banking features:

    http://www.fidelity.com
    http://www.etrade.com

  18. homerjay says:

    You really trust your money to a virtual bank?
    You’re a braver man than I, sir.

  19. Noumenon says:

    You can check if your virtual bank is FDIC insured here, same as any other bank. I’ve been banking with Zionsbank for five years, earning 2½-5% interest the whole time, while my bricks-and-mortar bank has been stuck at 0.5%.