In our two-part series, you are given a checklist that features every question you need to ask yourself before you apply for a checking account. With this two-part list, you will find out exactly what you need to research before you apply for your checking account. Following each question is a series of smaller questions to help you decide what is best. I also give a little advice about what alternative options you have when choosing a new bank.
What Is The Daily Withdrawal Limit?
Banks have withdrawal limits for a number of reasons. One of the most common reasons is to limit how much a thief can take in a single day or via a single ATM. Are the withdrawal limits suitable for your needs, and will the bank allow you to increase or decrease your withdrawal limit quickly, easily and without a fee?
Are You Currently Paying Monthly Fees That You Do Not Want To Pay?
If your current bank is charging you a fee, it may be because you have an account with special features. Find out if your current account is a premium or standard account. If you are paying for your account, see if you can downgrade your account to so that you do not have to continue paying fees. Alternatively, you may apply for a checking account with another bank that doesn’t charge monthly maintenance fees.
How Are Their Security Features?
Some banks offer a great deal of security features, and some offer a standard security package. Some banks have voice recognition that logs you into your telephone account automatically without having to give a password. There are some banks that will simply ask that you for a user ID and a password, and others will give you things such as a digipass.
Will The Bank Or Credit Union Actually Give You An Account?
Whether the bank or credit union will give you an account is not an urgent question because most will give you an account unless you have a terrible banking history or credit rating. If you have had trouble getting a checking account with other banks, then it may be worth giving the bank a call or paying them a visit to see if they are willing to take a chance on you. If they are not, you will have to search out second-chance checking accounts, which are often very limited and will most likely have maintenance (subscription) fees.
Are There Usable ATMs Nearby?
Most people do much of their personal banking online these days, which means more and more bank branches are closing down. If you do not have a bank branch nearby, then you have to search out any usable ATMs. If there are no usable ATMs nearby, then you may have to open an account with a bank or credit union that is established nearby.
Do They Have Network ATMs Nearby Where You Will Not Have To Pay Fees?
In the USA there thousands upon thousands of ATMs, and each is linked up to one network or another. If your bank is part of the network that your ATM uses, then you shouldn’t have to pay ATM fees. If you open your checking account with a new bank, will your local ATM charge you a fee? Some online-only banks will refund your ATM fees so that it doesn’t matter where you draw out your money. In addition, some stores will give you cash back without either them or your bank charging you a fee.
What Are The Unplanned Overdraft Fees And Interest Like?
Nobody wants to overdraw his or her account, but you have to assume that it is going to happen now and again. Find out if your new bank has a merciless policy or a forgiving policy. Some banks will set up a temporary overdraft where you are charged no fees and no overdraft interest so long as you repay the money within a few hours. Other banks will add on a fee, which pushes you further into your unplanned overdraft, for which they also charge you interest.
Does The Bank Offer Reasonable Lending Or Credit Options?
At some point, you may wish to get a loan, credit card or overdraft on your checking account. Is your new bank renown for offering great credit deals, or are they wary of lending to their customers? Do they offer great interest rates or high lending amounts? Are their repayment terms acceptable? Is it worth building a great banking history with this bank if they are only going to refuse to give you credit at a later date?
Does The Bank Have Reasonable Lending Interest Rates And Starter/Origination Fees?
Consider the nuts and bolts of your new bank’s lending policy. For example, some banks will allow you to take out a loan and they add the origination fee onto the principle of the loan, whereas others will debit the starter fee from your checking account. What APR interest rates is the bank advertising and what rates are they giving to people with a great FICO score and people with a terrible FICO score?
Do They Offer Stocks And Share Buying Services?
If you are looking to start investing, then find out if your new bank has its own brokerage services. Typically, a bank is going to charge you more for brokerage services than an independent broker will, but your bank may be more reliable, they may offer better research tools, and their services may be integrated into your checking account’s online-banking interface for your convenience. Do they charge a maintenance fee/ subscription fee for having a trading account, or can you open one for free?
Do They Offer Savings Options?
Most banks offer some sort of savings options. What sort of interest rates is your new bank going to charge and just how safe is your money? How long do you have to wait if you want to withdraw your money, and are you able to transfer it from your savings account to your checking account? Do they have tools to help you budget and save, and will they charge a transaction fee for transferring your money from your savings account to your checking account?
How Quickly Do They Process Checks?
Will it take a day, two days, four days, a week? Are you able to drop your checks off, or do you have to wait in line to see a bank clerk? Do they have an app that allows you to deposit checks by photographing them?
How Quickly Are Your Money Transactions Processed?
Let’s say you wish to transfer money to a friend who has the same bank as you, and let’s say you also want to transfer money to a friend that uses a different bank, and you wish to transfer money to a friend overseas by converting your currency to theirs. How long will each transaction take? How easy is it to set up each transaction, and how which transaction will be processed the quickest?
Does The Bank Make It Easy To Set Up New Payments And Direct Debits?
Online banking is supposed to make things such as setting up transfers and direct debits very easy. If your new bank makes it difficult to set them up, such as by asking that you visit a branch or call them, then maybe that bank is not for you.
Can You Conduct Most Of Your Administration Online?
You should be able to change your personal details online and apply for most of their services online. You should be able to manage all of your accounts without delays and without having to call their customer service department. Do they allow you to order and cancel your debit card online, or do you have to call them up first? How easy is it to contact their customer service department, and what transactions can you not undertake online? For example, they allow you to order a new checkbook, but they don’t allow you to cancel checks online? Do they allow you to apply for a saving account online, but ask you to call them up if you want a loan?
Do They Have Branches Nearby And Do You Need A Branch Nearby?
If a bank allows you to do most of your account administration online, then do you really need a local branch? If your bank allows you to apply for numerous things online and arrange for credit online, then why do you need a local bank? After a little research, you find that they do not allow you to input your checks digitally and you are paid by check each month, then maybe you do need a local branch. Does that branch have a drop box for checks, or will you have to see a bank clerk each time. Just because there is not a branch near you does not mean you should rule out that particular bank if most of your transactions and banking business may be done online.
Conclusion – It Is Never All About The Price!!!
Opening a new checking account usually means finding a new bank and opening your account with them. In this article, there are a series of questions that you should ask yourself prior to applying for your account. If you cannot find the answer to your questions online, then consider looking at user reviews for that bank. For example, if a bank conspicuously hides its unarranged overdraft fees because they are very high, you will often see complaints about it on websites that feature user reviews.