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Checking & Savings
Want to take the first step to smart money management? Start with your checking and savings accounts.
"If you develop good checking habits, if you develop good savings habits, all your money management challenges are going to
fall into place," says Susan Tiffany, director of personal finance information for adults for the Credit Union National Association.
The big focus for consumers
this year: put something aside, get interest
on that savings and steer clear of fees.
Here's how to make the most, and pay the least, on your checking and savings accounts in 2008:
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| Make the most (and pay the least) |
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1. Re-evaluate your needs and shop around
Institutions change and so do your needs. The bank that was right around the corner two years ago might not be convenient after you
change jobs. If your institution has merged, that "free" checking might not be so free anymore. Or you may have noticed that you're
losing more of your money to fees.
So take an objective look at what you need, what your bank offers and what it's costing you. Review several monthly statements.
How much are you keeping in your accounts? What are you earning? What are you paying in fees and how often are you getting hit?
While shopping around is always good advice, it's particularly important for 2008. "Competition for deposits has never been keener
among institutions," says Joe Belew, president of the Consumer Bankers Association.
The situation could continue. "It all depends on interest rates," he says. "As lending margins get more narrow, deposits become more
valuable because it's a cheaper source of funding than borrowing."
At the same time, Americans are saving less money than ever, so deposits are a scarce resource.
That doesn't mean banks will be giving away the store. More consolidation means fewer players to choose from, as well. So evaluate a
wide range of options: online institutions, credit unions, and large and small banks. See who's offering the best rates, the least
restrictions and the least fees.
Don't forget to give your current institution a chance to meet or beat the competition. Even if you don't want to move your money,
this can be a good strategy to negotiate a better deal on your interest and services.
You probably want to re-evaluate your options if your institution merges. Often policies change, so in many cases, it's almost like
a new entity. While merger mania among banks will likely continue, many believe it could slow a little in 2008.
2. Investigate all your alternatives
Look at the small and large banks, along with credit unions. Some institutions may pay foreign ATM fees or give you a healthy rate
of interest on your deposits. By investigating various types and sizes of savings institutions, you maximize your options. You also
reward the one that's truly offering you the best deal.
3. Be suspicious of free checking offers
"There's no such thing as free checking," says Eric Halperin, director of the Washington, D.C. office of the Center for Responsible
Lending. "People need to pick and choose their banks more carefully."
In many cases, penalty and service fees "will more than make up for what you're not paying for checking," he says.
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