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Sep 202011
 

Saving your hard-earned money in a bank account is one of the best exercises. However, such decisions are not to be randomly taken. There are several competing banks in the market that may try to entice you with schemes and offers for opening a new account with them. You need to be a smart prospective customer and scrutinize certain things before completing the account opening formalities and signing on the dotted line.

Considerations While Opening a Bank Account

Go through the below points in order to find the perfect bank for saving your money.

Bank’s Trustworthiness
One of the foremost points to look out for is the bank’s trustworthiness. Since you plan to deposit your hard-earned savings with the bank, it is essential to know that your money is safe and secure with the institution you plan to bank with. You need to make a background check of the bank and find out if the bank has all the necessary certifications to work. You may go online and check the Internet database for level of customer satisfaction pertaining to the bank’s reliability.

Maintenance of Balance
Whenever you are approached for opening a new account with a bank, check if the bank’s policies offer you a facility of zero balance maintenance. It is often noticed that a bank may offer zero balance facility for the first year of holding the bank account only. Subsequently, as your account becomes older, they revert certain rules and expect you to maintain at least a certain minimum amount of dollars in the account. These rules for balance maintenance change from bank to bank as well as for each type of account. At times, these rules change annually as well. As an alert customer, you should get a written set of rules pertaining to balance maintenance before you open your new account. Remember, if you fail to maintain the prescribed account balance, your account might be levied with certain charges.

Bank Charges
There is no service in this world that comes free of cost and that goes for banking too. There is usually a printed charge schedule available in every bank. You can find out if the bank charges money for issuing a new check book, debits cards, etc. Similarly, some banks charge dearly for returning of bounced checks, stop payments, for issuance of statements and other service charges. You need to collect charge schedule of competing banks and find out if the banks are charging competitive rates or not. Often, you can meet the bank’s manager and discuss certain terms with him. e.g. If you avail of multiple accounts or promise to keep a huge balance with bank, then chances are that you can negotiate with the manager for a waiver of fees and charges.

Banking Stationery Kit
It is essential to understand what all is included in the banking kit that customers are given when the account is opened. Here you need to be aware that a normal kit contains the bank’s check book and a debit card. Nowadays, owing to tremendous competition, banks also offer additional pieces of stationery in their kit. Make sure to find out if the bank offers a free credit card or discount coupons along with the rest of the stationery kit.

Banking Facilities
Banks don’t just offer you an account to save your money. They in fact, offer a host of other facilities like home banking, online banking, foreign exchange or forex services, loans and advances, investment advisory services, safe deposit vaults, etc. You can go online and check for the bank’s rating with terms to these facilities. The banks are also rated with reference to their customer service quality, efficiency of banking staff etc. An important point to be checked is that of the bank’s phishing attacks record. Phishing attacks refer to the fraudulent transfer of money through online banking facility owing to insecure online banking facilities. You may also find out details about the processing time taken by a bank for fulfilling your service requests in general.

Interest Paid
An important and crucial reason for saving money in a bank is to get monetary returns or interest against it. The banks have a policy to pay interest on certain types of accounts only. Also, the rate of interest applicable on your savings change with every bank’s policy and extent of balance maintenance. As alert customers, you need to find out the rate of interest you are liable to receive along with the monthly date on which bank’s interest become due.

Proximity of Bank
Often, prospective customers are approached by the marketing team of a bank and coaxed to banking account with them. Point is, your bank should be conveniently located near your home or your workplace. It is pointless to open a bank account in a totally different city or a far off suburb. If you have no option but to open such an account, then find out if you can operate the account from any other branches of the bank as per your convenience.

Opening an account is often a long time relationship between a bank and it’s customer. Over a period of time, your account gets connected to various other facilities like Paypal, electronic auto debits, bill payments, etc. It is, therefore, essential to be wise and opt for the best banking relationship from the beginning.

 Posted by at 3:52 pm

Joint Bank Accounts: To Share or Not to Share?

 Banking  No Responses »
Sep 152011
 

One of the first things any committed partners need to discuss is how to handle the joint finances. When you move in with someone or marry someone, it is impossible to think that you will be keeping your finances totally separate, especially when so much of your financial lives will be tied up together. Of course, you’ll be paying bills together and planning vacations together, etc. Also, if a mortgage is in both of your names or if unexpected needs like medical bills or a new appliance comes up, it’s safe to assume you’ll probably be sharing those expenses. However, with more women continuing to work outside the home after marriage and earning their own benefits and assets, sometimes it is difficult to think of sharing that with another person, especially with divorce rates on the rise as well. Having a joint bank account isn’t for everyone, but some careful consideration and a discussion with your partner will help you figure out the option that’s right for you.

The Pros of a Joint Account

Having joint bank accounts can be a wonderful thing. With all of your money in one place, it can be easier to track spending, pay bills, and save money for your future. Instead of having separate accounts from which you both spend what you want and don’t track it jointly, you have one account that every paycheck goes into and every purchase comes out of. With a joint credit card, you can also earn more rebate points together than separate, not to mention that building a good credit rating together is easier than doing it alone. Equally important is the fact that if one person has a bad credit rating, then financially attaching that person to the one with a better credit rating can improve interest rates and save your money over the long term. With a joint account, though, it is best to have one person in charge of the money and finances in the household. That person should be in control of the budget, paying the bills, tracking receipts, and be able to check online banking accounts regularly to be sure spending is not getting out of hand.

The Cons of a Joint Account

With divorce rates on the rise, it can be daunting to share a financial future with someone. Having no financial accounts in your name can hurt your credit rating in the event of a divorce or terrible loss. Also, when sharing all the bills and all the money, as well as sharing retirement accounts, you have to completely trust the person you’re with to do the right things with your money, which can be equally frightening. If you’re a person that has issues trusting someone else with your money, a joint account might not be right for you. This doesn’t speak badly about your relationship. Rather, it speaks volumes about your independence and ability to handle your own money. If you decide not to have a joint account, however, this might create more work for you and make you less able to track your joint spending.

Ways to Meet in the Middle

Just because you’re in a committed relationship doesn’t mean you have to share all of your finances, though you might find it beneficial to share some of them. It’s possible to keep separate checking and credit card accounts while also having joint checking, savings, and credit card accounts. Each of you can have your own spending money to do whatever you want with, and you both can keep a credit card to help keep up your individual credit rating. Then, the joint account can be used just for shared bills and expenses.

No matter what you decide is right for you, make sure you have this conversation with your partner early! Sharing finances is a very important part of a relationship.

 Posted by at 3:47 pm

Bank Transfer Day All About Taking Back Some Control

 Banking  No Responses »
Sep 052011
 

Over the weekend, thousands of bank customers decided to participate in “bank transfer day,” a move to get their money away from the “too big to fail behemoths” that are clearly in bed with politicians from both parties and into small community banks and credit unions. While it’s unlikely to really have a negative effect on the big banks, the point is to score a symbolic coup that shows the big banks that they’re going to have to adapt in order to get by in the world of the future. Or at least that’s how the thinking goes for some.

Bank of America’s $5 debit card fee was one of the first distasteful actions that led consumers to this weekend’s move, though there have obviously been others, and it has to be at least somewhat related to the fact that the big banks knowingly acted in an irresponsible manner that led to the economic implosion in the U.S., then were not only not punished for that malfeasance, but rewarded with government bailouts. While it’s true that Congress has passed new legislation to limit the predatory actions of banks, they’re still finding ways to get around it and they’re still in excellent shape thanks to the fact that no politician really wants to get on the bad side of the banks themselves.

Of course, even though Bank of America canceled its unpopular debit card fee, most feel the money will come from consumers somewhere. Said one man who was not going to switch banks after Bank of American canceled the $5 debit card fee, “I’m pretty confident they’re going to find some way to get that extra money. I’ll just have to see if it offends my sensibility enough to close the account.” Indeed, it seems that many other consumers will be doing just that as well.

 Posted by at 3:37 pm
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