Do you need a bank checkup?

Michelle Singletary
Columnist September 4, 2012

Here’s how I selected my first bank, the one I’ve been with for decades: A branch was a few blocks from my first job and on the way to the bus stop.

I’ve gotten frustrated over the years with the customer service and the fees that kept adding up. I’ve threatened on numerous occasions to kick this big bank to the curb. But I haven’t yet (service got better, fees dropped because of how my husband and I bank). But if I ever do think we need to change, it won’t be because I was put off by the inconvenience of switching banks.

Michelle Singletary writes the nationally syndicated personal finance column, “The Color of Money.” View Archive

There are so many choices that you don’t have to feel as if you’re being held hostage by a banking institution that has begun to get on your nerves. Banking is such a basic function of personal finance that you should consider a checkup. Are you getting what you need from your financial institution?

If not, maybe you need some help in how to select the most cost-effective option for your banking needs. If you do, the Federal Deposit Insurance Corp., the agency that specifically insures deposits at the nation’s 7,309 banks and savings associations, has put together useful tips in selecting a bank.

The summer issue of its newsletter, FDIC Consumer News, offers a 10-question self-exam to figure out the best way to handle your banking needs at any financial institution, including a credit union. The test is particularly beneficial if you’re in the process of helping a teen or young adult open an account.

I’ll get you started by walking through a few of the questions the FDIC recommends you consider. Top of the list is: How do you want to deposit money into an account?

There is the tried-and-true direct deposit. But perhaps you’re old-fashioned and like to see a teller. Or maybe you want to deposit checks using your smartphone or other mobile devices.

The bank where my 17-year-old daughter has her account just launched a mobile check-deposit feature. The bank promises she can deposit her checks securely without ever having to go to an ATM or bank branch.

She downloaded the bank’s free mobile banking app onto her iPhone. She was shrieking with excitement. I was cringing. She took a picture of her last summer-job check — front and back. But soon her glee turned into frustration. She couldn’t get a good-enough image and had to go to the ATM after all. But she vowed to try the new mobile application again with her next check. Me, I’m sticking to direct deposit and the ATM. By the way, to save on checking fees, my daughter has an ATM-only checking-and-savings account.

Next, ask yourself: How do you want to pay bills or buy goods? Have you become completely comfortable with using a debit card? The FDIC says that results from a recent pilot program at nine institutions offering electronic, card-based accounts found that “checkless checking” can reduce the risk of overdrawing accounts.

When was the last time you shopped around to make sure you’ve got the best online banking options for the best price?

Here are some questions you may not have asked in a long time. What is it costing me to stay at this bank? What does the bank charge for falling below the required minimum balance? Look at the fees you’ve paid over the past several months to a year. Are you getting your money’s worth in services? If not, another reason to see if another institution will do better.

The FDIC also suggests you ask: Am I giving too much consideration to “rewards” or other special offers?

“One-time deals . . . can induce consumers to select an account that isn’t necessarily the most cost-effective,” said Luke W. Reynolds, acting associate director of the FDIC’s Division of Depositor and Consumer Protection.

To get the self-exam, go to www.fdic.gov. Search for “What’s the Right Account for Your Everyday Banking Needs?” The FDIC’s summer newsletter has a number of articles devoted to helping you get the most from your banking relationship. You’ll find a link to the issue at the bottom of the agency’s home page.

It may be time for a banking checkup.

Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or singletarym@
washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. For previous Color of Money columns, go to postbusiness.com.

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