Dear Dr. Don,How can a person reduce checking account costs and banking fees?-- Melissa Minimize
Dear Melissa,The first place to start is in deciding how you like to bank. Is your paycheck on direct deposit? How many times per month do you use a debit card for purchases? Do you pay most of your bills online? Are you comfortable depositing checks and money in an ATM, or do you prefer to interact with a teller when you deposit funds? Are you living paycheck to paycheck, or do you keep a balance in the account? Do you find yourself paying a lot of ATM fees because you're not using your bank's ATM network?
Take a look at a sampling of your past months' statements to review how you bank and your average checking account balances. It should give you a good sense of what is important to you in your banking relationship. Consider more than just the checking account if you want your banking relationship to include savings, brokerage or loans.
If you've been getting dinged with fees for insufficient funds, then you want to manage your banking relationship to minimize those fees. The least expensive way is to keep track of your money and not let your balance drop below zero. Failing that, you want to look into overdraft protection options offered by the bank.
How you transact business with your bank will influence what type of account is best for you when you are looking to manage the cost of your banking relationship. You can use Bankrate's "Find a Checking Account" feature to search local markets and nationwide. Don't forget to consider your credit union or local savings bank when looking for a new checking account.