Know your checking account

March 26, 2008 12:00 am

All checking accounts aren't created equal.

There are some things that we take for granted in life and trusting banks is one of them.

I remember taking a class in high school on how to get a job, but not on how to balance my finances or even start a checking account. I decided on a bank because it was my mother's bank. I just walked in, said I wanted a checking account and signed the paperwork.

There are two types of financial institutions: for-profits and non-profits. An essential question to ask is what do you want from your bank. Is being an owner important or do you want to go with a large financial institution?

Credit unions are non-profits that are owned by its members. Every member is an owner and has a stake in the company. For example, Chetco Federal Credit Union's board of directors is elected by its members. They establish and revise policy, set dividend and loan rates, and direct certain operations.

There's no reason to pay monthly fees, opening fees, ATM fees, or maintenance fees. Most financial institution offer a completely free checking option. Shop around to find the cheapest option, especially if you don't think you can maintain a certain monthly balance.

Rebate points are the new things with checking accounts. Every bank is different, so make sure to know what the requirements are for rebates, percentages and how quickly they have to be used before expiring.

Another thing to think about is whether the bank is conveniently located. Larger banks have locations and ATMs all across the country. Some credit unions offer "shared banking" with other credit unions.

Also, make sure the money is secure. It should be protected by the Federal Deposit Insurance Corporation (FDIC). This is important if your financial institution goes under. This was established after the 1929 stock market crash. The FDIC protects up to $100,000 per depositor, but there is higher coverage for those with more money.

Before setting your heart on a particular bank, check to see if your financial past is going to be a problem. Some banks won't accept people with a history of bounced checks.

The next question is what are the penalties for bouncing checks. It can happen to the most cautious person. Some banks can tie a savings or overdraft account to the checking account as an added bonus. Be sure to note the fees associated and interest rates for overdraft accounts.

The Web site credit.com details all the fine print you should ask for.

•Complete written description of account fees, ATM fees and information on locations where free access is available.

•Details for debit card fees if you plan to use your card to make purchases.

•How many free checks you can write each month and minimum balance requirements.

•Information on how to order copies of cancelled checks if you do not receive them with your statement, if a check is disputed or for records.

•Information for contacting your financial institution if your ATM or debit card is stolen or if you suspect fraud with your account. Know the phone number to call the bank for questions about your account and the hours that service is available.

Don't be afraid to ask what may sound like stupid questions. A checking account is a great way to keep your money safe and protected. Just make sure the financial institution isn't charging up the wazoo in fees.