New Banking Options are Worth a Second Look

While many consumers have reservations about working with a bank, it is important to understand the benefits of working with an established financial institution. If you compare costs between banks and other money services businesses, you will see that working with a bank can actually save you money. In addition, banking technology now offers many options that make money management easier than ever.

According to the most recent checking account survey on Bankrate.com, the average monthly service fee was $5.84 a month. In contrast, most check cashing retailers charge a fee per transaction that can easily exceed the monthly bank fee over time. For example, one of the largest national retailers charges $3-$6 to cash a single check, depending on the amount. The same retailer charges separately for money orders and a prepaid debit card. These combined costs can easily run you $10 or more per month. You must also submit your photo ID and/or other personal information to retailers – just like you would be asked to do at a financial institution.

It’s good to know that there are still banks and credit unions that offer personal checking accounts without a monthly service fee or minimum balance requirement. Usually, they ask that you sign up for electronic statements or sign up for direct deposit so make sure you ask how to maintain a free account.

Often, it’s the dreaded overdraft fees that cause customers to flee banks in search of alternatives, especially when such fees average around $30 a piece. The good news is that technology is making these fees easier to avoid. Banks are required to offer you the option to “opt out” of receiving an approval at the point of purchase on debit card transactions if funds are not available in your account. While a declined card can be embarrassing, you can avoid the devastating effects of compounding overdraft fees. In addition, many banks and credit unions offer text or email alerts that let you know when your balance falls below a certain amount to avoid surprises or overspending.

While even the best laid plans can go astray, if you maintain a low cost checking account and keep a watchful eye on your balance using online banking and mobile alerts you will find your finances are easier to manage. For more financial tips or to help find the right checking account, read more here .

Article by Myra Reinhardt, Branch Manager – Coastal Community Bank, and Stanwood Camano Food Bank Board Member.