If you're on the ChexSystems list, it's important to understand the differences between and features of savings and checking accounts. You're probably shopping around for a better bank account, and this guide can be a big help. When it comes to finding a good place to put your money, you have lots of options. There are checking accounts, savings accounts, money market accounts and certificate of deposits (CDs). Each one offers different benefits, fits different needs, and has different rules and requirements. When you decide what's right for you, there are a few things to consider.
- Some accounts can only be set up if you have a minimum deposit. If your account goes below that number, you'll be charged extra or won't receive interest.
- On the subject of interest, it's important to pay attention to how much is paid, and how often you'll get it. Compare rates in your local area to those from national financial institutions at http://www.bankrate.com.
- Find out about limits on withdrawals. Can you take out your money whenever you choose, or is there a penalty?
- Look for deposit insurance. A sign in the bank will tell you that your money is protected by the Federal Deposit Insurance Corporation (FDIC). Credit union accounts also have protection, but from the National Credit Union Administration (NCUA).
- How easy is putting money in and taking it out? Can you easily get to a bank or ATM, or would you need to get most service online or via phone? Find out if you can make electronic transfers like direct deposits, too.
- If you're considering getting an account with check writing privileges, you should also think about how many checks you'll get, the maximum number of checks you can write every month, and any penalties for going over that number. Find out if there's a maximum or minimum amount you can write a check for, and if there's a monthly fee for the account. Some banks will also charge you a fee for each checks, or writing more than a certain number every month.
- Look for policies that state there are holds on checks. If you deposit money over a certain amount into your account, there may be a waiting period before you can get to it. There might also be a longer period of waiting if you deposit out of state checks.
- What about overdrafts? If you accidentally write a check for more money than is in your account, you should know what happens. You could link your checking account to a savings account so you'll be protected. Otherwise, you could face high fees from bounced checks, either written to you or coming from you. Since a bounced check can be bad for your credit, being covered is a good idea.
Keep in mind that Check 21 (the new Check Clearing for the 21st Century Act) lets banks clear checks electronically instead of actually exchanging your paper checks. This means that there's no requirement to return your original checks with your monthly statement, or when there's a problem with a check. Instead, substitute checks are created, which are used as legal representations of the originals. However, these aren't the same as ordinary check images, which aren't eligible as substitute checks.
It's always been a good idea to ask for your canceled checks with your statement every month. Now you'll receive substitute checks each month instead. It usually takes a day or two for banks to process checks the old way. Now, however, electronic processing happens almost instantly. This means that there's no float time between writing the check and the time that the money's taken out of your account, increasing the chance that a check will bounce. If you have your employer use direct deposit, putting your paycheck directly into your account, you can deal with the change in float time. In addition to this, the faster clearing time means that it's harder to stop payment.
Article by Kurt Lehmann-financial services expert, writing about ChexSystems, payday loans and second chance checking issue