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The Color of Money

Bank choices abound — so don’t be held hostage by yours

Here’s how I selected my first bank, which I’ve been with for decades. A branch was a few blocks from where I had my first job after college and on the way to the bus stop. Over the years, I’ve gotten frustrated with the service and the fees. I’ve threatened to kick this big bank to the curb. But I haven’t yet. (The service got better, and fees dropped because of how my husband and I bank.)

There are so many banking choices that you don’t have to feel as if you’re being held hostage. Banking is such a basic function that you should consider conducting a checkup. Are you getting what you need from your financial institution?

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If not, maybe you need some help selecting the most cost-effective option for your banking needs. The Federal Deposit Insurance Corp.has put together some useful tips for selecting a bank. Its newsletter, FDIC Consumer News, offers a 10-question self-exam. The test would be particularly beneficial if you’re helping a teen or young adult open an account.

Top of the list is: How do you want to deposit money into an account? There is the tried and true direct deposit. Perhaps you’re old-fashioned and like to see a teller. Or you want to deposit checks using your smartphone.

The bank where my 17-year-old has her account just launched mobile check deposits. It promises she can deposit checks securely without ever having to go to an ATM or bank branch. She downloaded a free app. 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 again, with her next check. I’m sticking to direct deposit and the ATM. By the way, to save on fees, my daughter has ATM-onlyaccounts.

Next: How do you want to pay bills and purchase goods? The FDIC says electronic, card-based accounts — “checkless checking” — can reduce the risk of overdrawing accounts.

Here are some questions you might not have asked in a long time: What is it costing to stay at this bank? What does the bank charge for falling below the minimum balance? Look at the fees you’ve paid over the past several months. Are you getting your money’s worth in services?

A questions the FDIC 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 the FDIC’s Luke Reynolds.

To get the self-exam go to www.fdic.gov for “What’s the Right Account for Your Everyday Banking Needs?”

The FDIC’s newsletter has articles devoted to helping you get the most from your bank. You’ll find a link to the issue at the bottom of the agency’s home page.

Singletary writes for The Washington Post.

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