How should I “shop around” for an account?
There are several features of accounts you should investigate at various banks.
- Find out what the interest rate is and whether the bank can change it after the account has been established.
- Also, find out if the bank pays different interest rates based on how much you have in the account, and if so, how it is calculated.
- Ask when the interest starts being compounded (when they pay you interest based on your principal plus your earned interest).
- Ask what the annual percentage yield is. This is a rate that will tell you how much interest you will earn on a deposit.
- Ask the minimum balance required before you start earning interest.
- Ask if you start earning interest when you deposit a check, or when the check is actually credited to the institution.
- Ask if you will pay a flat per-month fee.
- Find out if there is a penalty fee for dropping below a minimum balance.
- Ask if there is a charge for each deposit or withdrawal and how much.
- Inquire about ATM fees: making deposits, withdrawals, and how these fees vary if you use an ATM owned by the bank.
- See if there is a charge for bill payment by phone or online.
- Will I be charged per check I write?
- Will my fees be reduced if I have multiple accounts with the bank?
- Will fees be waived if I use direct deposit?
- Is there a fee for canceling a check?
- Is there a fee per balance inquiry?
- Will there be a fee if I close my account soon after it is opened?
- Am I charged a fee if I write a check that bounces?
- Find out if there is a limit to the dollar amount of withdrawals or frequency of withdrawals.
- If you close the account before your interest is credited, ask if you will still receive that interest.
- Find out how long it takes a check to clear, and how long you must wait to withdraw funds you have credited to your account.
- Establish the term of your account.
- See if the account will roll over automatically, and see if there is a grace period in which you can withdraw your funds after your term comes to maturity.