On Banking

I will admit to being completely uncomfortable with our banking systems in the United States. Even with that, and my dismay as programs such as the "dead peasant policies" that many have on their employees, which means that they collect insurance if an employee dies while working for them, there are also frugal reason why one should very seriously consider who they bank with.

Questions to ask yourself:

1. If this is a mortgage, are they going to sell it to another company who will in fact change the terms without you having any say. This is important because it costs money to refinance with another bank if you don't like the terms or don't trust the company.
2. Are they charging for your checking account? There are many small local banks and credit unions that do not charge for these services.
3. How do they handle overdrafts? I have just done some research on one popular and large bank and found that they are very tricky about this. They will "hold" money that has been withdrawn through an ATM or POS machine and approve more money if you need it even though you have spent it, but then, when the hold is gone, you are suddenly overdraft and are paying fees for each one. The bank I was looking at, as of four years ago, would charge more if you had overdrafted in the last 12 months and continue to charge until you have your balance back up again. This is even with overdraft protection. Read those papers that the new regulations require banks to send out in regards to this. If you have trouble understanding it, you can ask the bank or go online, or if you are really lucky, ask a friend who is a banker or lawyer to help you understand what you are agreeing to.
4. Do they pressure you to create accounts or loans that you don't need? We had to deal with a bank for a while where every time we walked in to do anything, we were cornered and questioned why our mortgage wasn't with them or why we didn't have a checking account with them. My daughter has since transferred to our bank, and believe me, they tried the guilt trip and attempted to make us question our decision. No bank should pressure you like that whenever you need their services.
5. New one I found out, if you write a check, will the person cashing it at your bank be charged a fee if they don't have an account with them? We just had that almost happen to us with a check. Then they wouldn't accept it and they would not tell us why. Since this was a business issue, it was imperative that we know the basic issue. Was the account closed? Was there not enough to cover it? I don't expect or want any personal information like how much is actually in there or social security numbers, just whether it is going to bounce on my account. I worked in a local bank many years ago (when it still took 5 days at least for a personal check to go from one account to another) and we were allowed to say whether or not the funds were available at that time. I couldn't promise it would be there when the check went through and I definitely couldn't give a balance, but letting them know if the funds for that particular check was there at the time was perfectly acceptable. In that, I am not sure if it has changed, but it is not unreasonable to asked.
6. Make sure you understand any and all fees associated with your accounts. Late fees for loans, overdrafts, low balances, ATM charges, replacement cards and online account payments are some that you should know before making the commitment to bank with them.

I am no longer in the banking business, so some of the rules have obviously changed, but you should know all of these things before going in and giving them your money. It is your money and in truth they are borrowing it and making investments. That is why runs on banks cause such problems, because the banks rarely have enough in actual cash to cover everyone's accounts at one time. Sure, some fees are fair and cover their expenses, but some banks are worse than others.

Also, watch where you use your ATM. I have been charged up to 5.00 to use a machine for cash. Try to plan ahead and take out all the cash you will need for the week from an ATM that does not charge you, or if it does at least you are only being charged once rather than many times as you withdraw as needed.

I doubt I need to remind everyone to keep careful track of balances. In this day and age it is remarkably easy to do, even if you do not use a check register. In an age of ATMs and POS machines, this accounting seems to have fallen to the way side. Look online, see what is available against what they say is in there. These are two different things. The available amount is what they consider you actually have, and don't forget to check and see that all your charges have gone through and use simple math to figure out how much you have left. I still think that old fashioned registers are the best, but also realized that this is much harder to do now that you don't have a check number to put down to identify the withdrawal.

Now, for the most part I practice what I preach, but I still haven't changed my money market to a regular checking despite never having a balance that keeps me from being charged and the charge is always more than the interest earned. So, on that note, my husband and I will be changing account types as soon as possible.