September 2016 Bank Account FROM PAGE 1


have minimum balance requirements or monthly maintenance fees. Many banks will reduce or even eliminate these requirements if you have your paycheck directly deposited or you have a minimum number of electronic transactions.


bank that describes the account’s terms and conditions before making a final decision. Federal rules require certain information to be disclosed to consumers before opening an account. You can review a bank’s account agreements online or by stopping by a branch. Looking at a legal document may appear intimidating


consuming, but many banks offer simplified disclosures and knowing how the account works is worth it to ensure that you understand all aspects of the account, including the potential fees and when they may be assessed. That’s the best way to avoid surprises.


Managing an Account and balance


consumers use pen and paper, a check register, a computer spreadsheet, a website or an app to ensure that they stay on top of what is happening in their accounts. Whichever method you choose, track every transaction — be it a deposit, check, ATM transaction, debit card transaction or online bill payment — to handle your money effectively and avoid spending more than you’re comfortable with. You also can monitor your transactions using online services provided by your bank. In addition, many banks offer alerts via email or text to notify customers when their account balance drops below a specified level or when a check has cleared.


overdraft fees for withdrawing more than what is in your account. Opening


Understand how to avoid


Follow your transactions your accounts. Some


or time- Read the agreement from the Also, some bank accounts may


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a checking account has long been the way customers establish a relationship with a financial institution. However, a traditional checking account may not be for everyone and can quickly become harmful to your finances if you’re not careful about incurring fees, including overdraft fees.


offer a “checkless” checking account. These types of accounts generally do not come with the ability to write paper checks, but enable customers to pay bills, make purchases and otherwise withdraw money electronically


banking online or using debit cards or mobile apps.


great option for consumers who prefer to use their computer, smartphone or other mobile device for banking. Generally, these accounts do not come with the ability to be overdrawn, so users will not be subject to the high overdraft or insufficient funds fees that come with many traditional checking accounts.


checking accounts, a careful decision should be made regarding whether or not to “opt in” (agree) to overdraft coverage. Most banks offer overdraft programs that allow customers to make ATM withdrawals or perform certain debit card transactions that exceed the customer's available balance.


overdraft transactions trigger fees that may reach $35 or more per overdrafted item, but banks are only allowed to assess fees for paying an ATM or one-time debit card transaction if the customer has opted in to overdraft coverage.


aware that ATM and one-time debit card transactions that go over the amount of funds in your account will be declined.


“Think carefully before deciding to opt into this kind of fee-based overdraft program,” said Heather St. Germain, a senior consumer affairs


If you choose not to opt in, be These For those who prefer typical Checkless accounts may be a by Today, many financial institutions


specialist at the FDIC. be charged several


in a single day because most banks will assess a separate fee for each transaction that exceeds your account balance, so the costs can add up quickly.”


bank if you can link your savings account to your checking account to


cover transactions when you don’t have enough money in your checking account. A bank may charge a fee for this automatic


but the fee is typically smaller than an overdraft fee.


transfer automatically transfer funds to service,


fees compare by reviewing the bank’s account agreement or fee schedule. These documents are usually available online or can be picked up at a local bank branch.


charges is to keep a close eye on your account balance and on how much you plan to spend. Also, make sure you have enough in the account to cover any


payments you have set up.


bank account. With this feature you don’t have to worry about finding time to make deposits yourself. Using the service may also help you with savings, as you can set up your direct deposit to have a certain amount from each check automatically sent to your savings account.


incentives if you sign up for direct deposit, such as increasing account’s interest


certain minimum balance requirements and fees.


of any conditions. If you have money in your checking account that you do not expect to use right away, moving it to a savings account or a certificate


Earn more interest, but be mindful rate or waiving


In addition, some banks offer the


deposited automatic (typically monthly)


benefit checks. Direct deposit allows your money to be safely and securely electronically


Direct deposit your pay and into your The easiest way to avoid overdraft Find out how the Another option is to ask your overdraft


The Hampton Roads Messenger 15


“You could fees


of deposit (for a set period of time) can be a good personal-finance strategy for building short-term savings and earning


switching accounts, find out if there may be restrictions or requirements.


how soon you can withdraw funds from a certificate of deposit without paying a penalty, and restrictions on the number of withdrawals during a month from a savings account,” said Luke W. Reynolds, chief of the FDIC’s Outreach and Program Development Section. “Your institution may also offer a different


product that pays a higher rate of interest, but you might need to meet certain requirements, such as having a set number of debit card withdrawals post to your statement during


month. Be sure you are likely to meet any requirements based on how you normally handle your finances.”


theft and fraud. Check your accounts regularly for suspicious transactions. Protect your passwords and PINs. Also avoid clicking on links or responding to emails requesting personal information such as Social Security and bank account numbers, no matter how legitimate they may look.


contact you unprompted requesting sensitive information. Contact your bank to learn more about the security features it offers or tips it suggests for customers.


companies will never Help guard your accounts from checking account the “Be aware of limitations on more interest. But before


fictitious websites and emails claiming to be from government agencies or trusted companies. In general, legitimate


That’s because criminals create


account brings important benefits, including access to safe and affordable financial services in good times and bad. If you choose well and manage wisely, your banking relationship can evolve and grow as you do — affording you access to more options for credit, savings and investment when you are ready and when you need them.


The bottom line: Having a bank


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