(Daily Chive.com) – The recent shenanigans within the banking world have made millions of everyday Americans rethink their banking options. It’s true that most of us wouldn’t be affected by a bank run since deposits are insured up to $250,000, but it’s always worth thinking about whether you’re getting the most from your basic accounts.
Everybody has different financial needs, and there are lots of options for checking and savings accounts. The trick is to find the accounts that will help you meet your long-term financial goals. This takes a little more time and research than clicking on the link for the shiniest and most sophisticated advertisements you see for banks and credit unions—but it’s well worth your time.
What are You Looking for in a Bank?
These are some of the things to consider when you’re bank shopping. How important are these benefits?
- Low maintenance fees
- Maximum interest rates
- Availability of ATMs
- FDIC insurance
- Online banking options
FDIC insurance is the critical thing here–if the financial institution meets the requirements for FDIC insurance coverage, then all of your deposits are safe up to a quarter of a million dollars. FDIC insurance used to be almost a given, but if you’re thinking of opening an internet banking account, be sure that you have this protection should the bank go sideways.
The next thing to consider is the teeter-totter of fees and balances. If you maintain a high balance, you’ll generally pay less in fees. Some banks offer deals to first-time account holders (students and young people) where balance minimums are reduced, or there are no fees.
If you’ve had bank accounts for awhile and are looking for a new option, you’ll probably notice that the check-writing regulations that used to determine which type of account you had, have disappeared. Why? Because processing checks is a lot more labor-intensive, even in the automated world, and people are paying more and more bills online. So your banking activity is costing less when you don’t write paper checks, and you get rewarded with lower fees when you use online services.
Savings Accounts
Savings accounts are still a good way to accumulate cash—even if the interest rates are ridiculously low, your money is safe. If you keep a substantial amount of cash in savings, you may qualify for a high-yield (higher interest rate) savings account, but be prepared for restrictions against withdrawals. If you like to build up your savings and forget you even have that account, this is a safe and solid option.
Certificates of Deposit
Banks and credit unions also offer long-term savings in the form of certificates of deposit (CDs). You’ll earn a little more interest than a savings account, and your principal and interest are returned to you when the CD matures.
Money Market Accounts
Money market deposit accounts are a combo of checking and savings. You’re required to maintain a certain balance, usually higher than a premium savings account, but interest earnings are higher than savings. MMAs also offer debit card and check-writing privileges, just like a checking account.
Credit Unions
If you’re thinking about a credit union, they may have fewer options (premium checking, no-fee accounts) but more flexibility for members. Fees are typically lower, interest rates on loans may be lower, and interest rates on accounts may be higher. Credit unions operate as non-profits so they don’t have shareholder pressure to boost earnings.
Do Your Research
The banking landscape has shifted so much with the digital economy that you have many more options than before. When you’re researching the best financial institution to fit your needs, just be sure that you’re only considering FDIC-insured banks or credit unions, and that they have solid ratings from any of the well-respected ratings companies.
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