August 2004
Is Your Checking Account Saving You $$$$ or Costing You?
All checking accounts are not created equal. Depending on your personal financial needs and habits, selecting the right checking account can save you up to several hundred dollars annually. Select the wrong account, and even a “free” account can cost you big bucks. The following questions can help you take a look at your current bank or credit union checking account.
Is the “free” checking really free? Some financial institutions promote “free” checking accounts that may have no “monthly service charge” but milk a customer’s account for lots of per-service fees every time you use a service. Such fees include ATM fees (including balance inquiry fees), bounced check fees, per-check fees (over a limited “free” number), check card fees, phone transaction fees, online banking fees, etc. In contrast, a checking account that has a small monthly service charge but then does not charge separately for a range of useful services can be a much better deal. Elevations CU Free Checking has no minimum balance and no monthly fee.
How high is the minimum balance required to earn interest and/or avoid a monthly service charge? Many checking accounts don’t charge a monthly service fee if you maintain a minimum average balance in the account; many of these also pay interest or dividend earnings if the minimum balance is maintained. In Bankrate.com’s survey, the national average balance required for interest-bearing accounts was $2,257.82, and a number of accounts require $5,000 balance. Nationally non-interest bearing accounts require an average $245.37 balance to avoid fees. While Elevations CU eStyle Checking requires a $500 end of month minimum balance and Dividend Checking requires a $10,000 end of month minimum combined balance, Free Checking requires no minimum balance. (A combined balance is the total of the balances in designated accounts such as savings, checking, and money market accounts but not IRAs.)
What are the ATM fees for the account? Most checking accounts charge surcharges for using ATMs that are not branded with the financial institution’s logo. These surcharges range from $0.50 to $2.00, with $1.50 most common. The institution whose machine you use also tacks on a charge. Consider how and where you use ATMs and then look at the checking account ATM fees before you chose a checking account. An Elevations CU member gets unlimited free ATM transactions at all Elevations CU ATMs, 8 free withdrawals a month from CO-OP Network ATMs, and 2 free withdrawals per month from all other ATMs. Additional withdrawals are $1.50 each. You can find an ATM with this link.
How does the account handle “bounced checks"? These fees, which range up to $35 and average $25.80 according the Bankrate.com’s survey, are a real money maker for many financial institutions. Some institutions also add a daily fee until the account is brought into balance. Your best choice is to set up standard overdraft protection. Elevations CU offers several overdraft protection options.
How high is the minimum deposit to open a checking account? Maybe some advertised checking account offer looks interesting, but before you leap ask what’s the minimum required to open an account. Nationally, the required minimum to open an interest-bearing account is just under $500, to open a non-interest account requires about $60. There isn’t a minimum required to open an Elevations CU Free Checking account.
Picking the right checking account can provide not only the services you need, but also save you money. So always take time to compare all the costs of any offer.
Check out all the checking options offered by Elevations CU.
Prepared for Elevations CU by Remar Sutton & Associates, August 2004. All rights reserved. Reviewed and updated July 2006.
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