Being Smart with Your Checking Accounts
Be Smart with ATM Cards
ATMs, or automated teller machines, are a great convenience. They are located just about everywhere, or so it seems. All you do is insert your ATM card (which might be the same card as your debit card), enter your personal identification number, and out pops some cash. The withdrawal is deducted from your bank account—and of course, if your balance is not enough, you won’t get the cash!
As convenient as ATMs are, they can be dangerous to your financial health. Whenever you use an ATM that does not belong to the bank where you have your account, you are changed a fee. Actually, you are usually charged two fees—one by the owner of the ATM for using their machine, and another by your bank for using an out-of-network ATM. These can add up to $3–$4 for a single withdrawal—ouch! If you make an average of one out-of-network withdrawal per week, you are easily looking at $100–$200 in fees a year.
Sure, when you really need cash and cannot find a bank machine, the convenience might be worth the fee—once in a while. But generally you should avoid making out-of-network ATM transactions. Here are some tips that can help:
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Find out where your bank’s ATMs are located. Keep the list in your car or wallet.
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Ask if your bank has a cooperative relationship with any other banks, permitting fee-free ATM transactions at the other bank’s machines.
- Think ahead and get enough cash so you won’t be caught short-handed when you cannot get to an in-network ATM.
Cheap Checks
With most checking accounts, you have to pay for new checks. Most people just go ahead and order from their bank without realizing that they do not have to. There are numerous independent check printing companies that can make your new checks. Not only are they usually a lot cheaper than the bank, but you will generally have a much wider choice of styles and designs.
Next time you need to replenish your supply of checks, look into these companies. I usually find their advertisements in the newspaper supplements.
Checking Account Dos and Don’tsDo keep accurate track of your balance. Do get overdraft protection for your account. Don’t use overdraft protection as a source of quick cash. Don’t use your ATM card at machines where you’ll pay a fee. Do consider accounts that are free with a minimum balance or other bank services. Do look into buying new checks from a third party rather than from the bank. They are usually less expensive. |
Other Account Services
When evaluating checking accounts, people understandably look first at the most important features of the account, such as fees and required minimum balance. Some other factors might make a difference depending on your needs and situation. Here are some you might want to ask about:
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How extensive is the “home” ATM network (where withdrawing cash is free if your bank is a member of the network)?
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Does the account provide free or discounted services, such as money orders, cashier’s checks, foreign currency exchange, wire transfers, travelers’ checks, or notary service?
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Do account holders get a discount on safety deposit boxes?
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Are replacement checks and checkbook covers free?
Banks are always competing for customers, and you might be surprised at the extras that come along with some checking accounts.
Watch Out for Teller FeesAn unfortunate development at some banks is the imposition of teller fees. You will be allowed a certain number of in-person transactions, such as making a deposit at a teller window. Beyond that number, there is a fee for each in-person transaction. The idea of course is to encourage customers to use automated services, such as online account information and ATM machines, that reduce the bank’s expenses. Maybe you almost never use a teller and these fees will not bother you, but you need to ask. |