Deciding where to put your money is complicated these days. Banks and credit unions offer a variety of services and products so you need to find one that meets your needs and still be one that you can afford. All banks, credit unions, savings and loan associations, and deposit taking industrial loan and thrift companies are required, under Minnesota law, to carry deposit insurance from a federal insurer so deposit safety is not an issue in Minnesota. You still would want to diversify large deposits to obtain maximum coverage available under the deposit insurance.
The first questions to ask concern what you need from your financial institution:
Are multiple locations necessary, or access to many ATMs?
Do you need access to international money markets? Do you have personal accounts or business accounts?
What are your borrowing needs?
What can you afford in fees?
How many transactions do you make each month? Do you use a debit card?
Do you have direct deposit?
How many teller visits do you average a month?
Do you want 24-hour banking by telephone?
Once you determine your needs, you can start looking for an institution that meets those needs. The ideal choice has all the services you need so you have only one place to deal with.
After locations and services are narrowed down, fees are the next thing to look at. Each financial institution offers different kinds of accounts with different fee schedules. You need to match your method of banking with a fee schedule you can afford.
If you make many deposits each month, you need to ask if there is a charge for visiting a teller.
If you have direct deposits, does the institution offer a checking account that has lower fees because of the use of direct deposits?
If you carry a large savings or certificate balance, do you get reduced fees on a checking account?
If you want to get your paid checks returned, does the institution offer that service and is there a fee for it?
If you have direct deposit, but feel the need to verify, by phone, that the deposit has been received, is there a charge?
Will the bank pay an occasional, inadvertent overdraft or will the checks be returned?
What is the method of charging overdraft fees- per check, per day, a maximum charge?
Don't make the assumption that what your current institution is offering in services is standard for the industry. After signing up for an account and paying to have checks printed, you don't want any surprises.
Another issue to determine is the bank's availability of funds. There are set limits on when funds from deposits have to be available for you to draw on, according to federal regulations. It depends on the type of deposit, how it was deposited, where the checks are drawn on, and how much the deposit was for.
For example: If an institution uses the full limits of federal regulations, the funds from the paycheck you deposit on Friday are not available to be drawn on until the second business day following the day of deposit, or Tuesday. That is, if the check is drawn on a local bank, does not exceed $5,000, and was deposited before the cut off for the business day at the institution.
Some banks give immediate credit on all deposits. Your bank's practice on funds availability is important to know to see if it corresponds to your cash flow. While an interest rate may appear better at one institution, if there is a processing fee or withdrawal fee, the higher interest rate may not be a good deal. Finding out this information beforehand can save you a lot of time and a lot of money.
Once you have an account, always balance your checkbook on a regular basis. While consumers have protection under consumer protection statutes, the same statutes put the burden of detecting forgeries, errors, or unauthorized transactions on the consumer and within certain time frames. Be sure to look at all of the inserts in your statements. When a bank is changing its fee schedule, the requirements for disclosure to customers can be met by adding a pamphlet or a note on a statement.