It can be difficult to go through life without a bank account in place. When you do not have a bank account, something as simple as cashing a paycheck or paying a friend can be quite difficult. The problem is that many people do not know what to look for before they open a new account. Those would-be savers often encounter all manner of problems, from hidden fees and service charges to unrealistic balance requirements.

There is no one bank account that is right for everyone, so it is important to look at your own situation and determine what is important to you. New workers just starting out will likely need a much different account than established employees looking forward to retirement. Choosing a bank account based on your individual circumstances – and adapting your account choices as that situation changes – can help you make the most of your hard-earned money.

Opening Deposit
The opening deposit is obviously an important factor when choosing a new bank account. If it takes $1,000 to open a new checking account, you obviously will not be able to open that account if you do not have the funds available. If you are just starting out and beginning to put money aside, a checking account with a low opening balance can be a great choice.

Minimum Balance Requirements
Even though the opening deposit requirement is an important factor, you need to look beyond it before choosing a bank account. The minimum balance requirement is just as critical. Some banks tout a low opening deposit but charge a hefty monthly service fee for balances under a certain threshold. That is why you need to look at the fine print and make sure the minimum balance requirement is one you can live with. If you have doubts about your ability to maintain that level, it is best to move on and look for another account.

Monthly Service Charges
Monthly service charges can really eat away at your savings, so it pays to choose your account carefully. Depending on the bank, monthly fees for checking accounts can be as high as $10, $15 or even $25 or more. If the bank account you are looking for charges such a fee, it is important to look at the requirements for waiving that fee. Some banks, for instance, waive service charges for customers who maintain a certain balance, or those who choose to pay bills online or receive their paychecks via direct deposit. Reading the fine print and understanding these terms and conditions is the best way to keep more of your money in your checking account.

Interest Rate
Checking and savings accounts provide a great convenience, but they can do more than that. Some accounts pay interest to their owners, giving you even more of an incentive to save and manage your money wisely. Interest rates can vary widely between banks – and from account to account – so it is important to shop carefully. Some banks also offer tiered interest rates, providing account holders with larger balances a higher interest rate. It is important to look at the balance you expect to maintain and choose your account accordingly.

Direct Deposit Requirements
Having your paycheck direct deposited can be a great convenience, and in some cases it may be a requirement of your new checking or savings account. In some cases the bank will require a direct deposit to waive certain service fees, so be sure to read the fine print carefully. Some banks may even provide new account holders with a special monetary bonus or free gift when they establish a direct deposit, so do not be afraid to ask about those perks.

Nuisance Fees
These days banks charge fees for more than just bounced checks and overdrafts. Some banks charge fees for getting a copy of a check, opting for a paper statement or even checking your balance. These nuisance fees can really add up, and that can reduce your balance quite quickly. The best way to protect yourself against these troublesome fees is to read the account disclosure documents carefully. Do not be afraid to ask the bank representative if anything seems confusing or unclear.

Choosing the right bank account is not always easy, but it is well worth the search. Finding the perfect checking account gives you all the convenience – with none of the fees or hassles.

by beconrad


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