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Basic Checking Account
Basic Checking Account

Basic Checking Account

Remember the press coverage some years ago about Americans switching from big banks to community banks, credit unions and online banks? Remember National Bank Transfer Day? It was a success for credit unions but made a little dent in the consumer retail banking sector.

Changing to smaller banks maybe a good move for some people. But the fact is that some consumers need a big bank. Maybe they travel a lot for work and need to bank at a place that has branches around the country. Or maybe you have a kid in college and want to be able to put money into an on-campus account or monitor spending. The question is which big bank is right for you?

If you come to the conclusion that the banks are all the same, they all adopt the same policies, offer the same services offer the same online banking facilities, then it all comes down to fees.

To simplify matters, let’s take a look at the most basic checking account offered by the 10 largest retail banks in the U.S. and compared their fees for basic transactions and common penalties.

In some ways, the banks are remarkably similar: All but TD charge 3 percent for using a debit card for a foreign currency transaction. All except for PNC charge a monthly maintenance fee. But those monthly fees range from $2.99 to $12 and most banks offer a few ways to dodge the fee, such as getting direct deposit social security or paychecks or having a minimum balance.

When it comes to penalty fees, most banks charge around $35 for overdrawn accounts, although about half have a sliding scale so that small amounts or first-time offenders pay less. Bank of America and Citi automatically block point-of-sale debit purchases if the amount would put the account into the red.

Banks also offer cheaper alternatives: You can link your checking account to a savings account or line of credit, and if a transaction would cause you to overdraw, the money will automatically be transferred from that other account into your checking account for a smaller fee (usually in the $10-$12 range). Even with the new rules, you can still overdraw your account if automatic payments bring the balance below zero or you bounce a check, either of which will get you zapped with a fee.

There are a few other variations and quirks between the offerings. About half the banks we surveyed charge customers to close an account if it’s been open for just a few months; U.S. Bank has a dormancy fee that kicks in if you don’t use the account for a while. HSBC limits its customers to eight free check or withdrawal slip transactions a month, after which they’re 35 cents each.

We can go bank to bank to do a comparison, but this is easy enough to find online, much like credit card programs, determine what your habits are and what fees would be applicable to you and find the bank that offers the products and services that best fit your lifestyle.

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