Pop quiz: Which account do you use most often?
If you answered your checking, then welcome to the masses.
While consumers are writing fewer checks than ever, checking accounts are still, by and large, the most popular way to manage daily spending for consumers. From depositing paychecks, to paying bills, to keeping our money insured, we rely on our checking accounts to fuel our daily financial needs.
The sad reality is that the cost of having a checking account at a megabank continues to cost us more.
The average overdraft fee at one of the five largest U.S. banks will now cost you $35 — a 30% increase since 2005.
Mega-sized financial institutions collect billions each year from overdraft and ATM fees alone, typically leaving consumers frustrated and in search of other options.
If you’re fed up with this feeling, there are certain things you can be on the lookout for in your search for greener pastures (and more green in your pocket).
Find the right checking account for you by considering three important factors.
Cost of fees
Before opening a new checking account, always ask for the institution’s fee schedule. It will provide you with a breakdown of different fee amounts for the services associated with your account. It should cover everything from wire transfers, to monthly maintenance fees, to overdrafts.
The fee schedule should be available on your bank’s website. A quick Google search pointed us towards the fee schedules for the five megabanks listed in the chart above:
A typical rule of thumb is to make sure you aren’t being charged any monthly fees to operate your account. Not having to maintain a minimum balance each month goes a long way. Though “free” checking is becoming harder to find, many local banks and credit unions still offer it.
Most banks now offer convenient features like online banking, online bill pay, and a mobile app. Finding a bank or credit union that places online security as a high priority is important. Make sure your bank doesn’t skimp when it comes to keeping your information secure.
Here are a few steps you can consider in keeping your info and money secure:
- Ask for two-factor authentication - A multi-factor security feature, which requires a text or email confirmation is a great way for a bank to keep your account logins safe.
- Ask your bank how they’re keeping their records secure – Give your bank/credit union a call or visit their website to see what how they are adapting to the evolving online security threats.
- Make sure your browsers are updated before logging in – Using an old version of Chrome or Firefox increases your vulnerability to malware, Trojan, and phishing attacks. Yes, it’s easy to avoid that annoying update reminder, but for the sake of your dollars, make sure your browsers are up to date.
- Don’t check online banking with public wi-fi – Always make sure your browser is secure when checking online banking. Your URL should always start with “https://” (the “s” standing for secure). You can also look for a lock or key icon next to URL in your browser.
- Set up double-authentication for wire transfers – Once money is transferred, it is a nightmare to get it back. Make sure to let your bank know that they need written or verbal approval from you before initiating any wire transfer.
Equally important to low fees and online security is finding a trusted financial institution in your community that supports growth and development. Smaller financial institutions don’t have the same costs and agendas that a lot of megabanks do.
Local banks and credit unions focus on providing financial services to not only improve their customers’ financial standing, but help their surrounding community as well. This is baked into their mission.
See why it pays to invest in your community.
While avoiding fees and boosting your bottom line should be priority #1 for you, a bank or credit union that aligns with your personal values is worth something.
This post was written by Ben Premo of TrueFees. TrueFees’ goal is to bring bank fee transparency to consumers through an easy-to-use tool.