If you’ve made it through 6 Steps to A Better Checking Account, you are ready for a few other ideas to turn your checking account into a potent tool for managing your finances:

1. Don’t be afraid of multiple accounts – You have to start with one checking account, but that doesn’t mean you have to stop there. Most banks and credit unions will let you have multiple accounts, often free just like the first one. Personally, I have one for the house, a second for business and a third for myself. It’s a little more work, but it makes keeping the cash straight much easier. No more worrying that you spent your business reimbursement on that quick trip to Atlantic City.
2. Don’t assume that once you start with one bank, you can’t do business with another – The big bank on the corner would love you to believe that once you have an account with them, you’re with them for life. Once you start believing that, you may not notice that their auto loan rates are 0.25% higher than the other guys, or that their mortgage folks charge an additional $100 on loan origination. It is a slippery slope.
   Every financial transaction stands on its own. Look for the best deal every time, and don’t let loyalty to your primary bank make you accept being overcharged for an identical pile of money. Having familiarity with a bank means you should at least consider them on the next financial transaction, but it gives them no guarantee of your future business.
3. Don’t always be swayed by the interest rate – My local bank once offered me a decadent 1.5% interest on my checking account, so I did a little math. If you have an average balance of $1000, 1.5% will net you $15 every year. Great! But if your balance drops below $250 at any point during any month (stick with me, I know this would never happen to you), there is a $20 monthly service charge. If it happens again a second month – boom, another $20. Something tells me the bank was betting on one or two of those fees every year.
   You can use the same approach to evaluating an extra 0.25% with some bank by mail institutions. Yes, 0.25% is real money and the banks are just as well insured. But compare how much extra you earn per year ($2.50 on a $1000 balance) versus the inconvenience of mailing every deposit, waiting an extra three days for deposits to clear, plus the cost of stamps and envelopes. That extra quarter point hardly seems worth the effort.
4. Don’t be afraid of smaller institutions if they meet all your other criteria – I love my credit union – it’s where I have most of my everyday banking accounts. They are convenient, frugal and no frills. Sure, their jingles aren’t as catchy, but when I need to get a loan approved fast, they don’t have to run to the Loan Advisor department in Des Moines to get it approved. More importantly, their rates are consistently a little better than the big banks.
   Credit unions used to be hard to join, but that is seldom the case any more. Be sure to consider them before if you are looking for good, basic service.

(Photo Credit – aeropw)