If you want to open a personal bank account, the type of account you choose will depend on the level of control you need to have over your money.

This article briefly examines three different accounts and discusses some of the costs you are likely to face.

Whatever type of account you choose to open, make sure it is covered by FDIC insurance. This will protect all the money in the account if the bank goes bust.

For day-to-day money management, you are essentially limited to two types of account, namely a checking account and a savings account, and both will have obvious and hidden fees associated with them.

Common Fees

Both accounts will attract maintenance fees, which can often be waived if you meet certain criteria. The most common types of additional fees are ATM charges. All banks will charge a transaction fee if you use their card in another network’s ATM. Be aware that transactions include account lookups or electronic transfers.

If you use your card to make foreign purchases or withdraw money while abroad, you will be charged transaction fees. If you ask your bank to stop payment of an ACH, you will have to pay a substantial fee.

Checking Accounts

Most banks will not pay you interest on checking account balances unless the balance is very large. Non-sufficient funds (NSF) fees, stop check fees, and overdraft fees apply. Most banks apply lots of hidden fees to checking accounts, and you need to be sure you are aware of these. Beside fees on checking account banks also charged for the personal checks and it typically cost more because bank obtain their checks from national printers, When you order checks online, you are ordering directly from the manufacturer, therefore saving money.

Savings Accounts

You do not get a checkbook or an overdraft facility with a savings account. Savings accounts will earn low interest on their balances. There is usually a minimum amount to deposit to open one.

Federal law limits the number of withdrawals you can make, excluding in-branch or ATM withdrawals, and you will have to pay a fee for each withdrawal over the limit.

CD Accounts

With CD accounts, you deposit a lump sum for a fixed term. Normally, there are no fees payables on a CD account. However, if you want to take out money before a CD matures, you will have to refund any interest you have already received, and pay an early withdrawal fee.

How to Keep Your Banking Costs Down

  • Understand how you use your bank. The total of monthly fees you pay your bank depends on how you use the accounts you have.
  • Always try to use your own bank network’s ATMs.
  • Shop around and make sure you fully understand all the rates and hidden fees each bank charges. Hidden fees are often buried in the small print.
  • Draw up a comparison sheet. Using your own personal data, calculate how much you would pay each bank.
  • Do not develop a sense of loyalty or emotional attachment to any bank. You can be certain such feelings are not mutual. Your bank would withdraw its service to you without a second thought if it felt it could earn more money by doing so. You should be equally ruthless.
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