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Show Cmianinmfiimg flimiteirestt Checking, savings services vary from bank to bank by Carol L Clark I'tah consumer education specialist Checking and savings accounts have a diversity in the current financial market they've never had before. Regular checking accounts generally gen-erally require you to keep a certain amount of cash in them. As long as you maintain the minimum, you can write checks and make as many deposits as you want without paying 'any monthly service charge. Some banks require a monthly service charge with no minimum balance. When you're choosing a financial institution which you'll primarily use for checking, look carefully at all the options available. Find out in advance which service will be most convenient for your needs. If you write a large number of checks each month and you're docked for checks over 30 in number, for example, you'll do better off going somewhere else. Sometimes a bank will give you unlimited check-writing privileges as long as you maintain a certain amount of cash. Keeping the cash in the checking account, however, may be more expensive than putting it somewhere else, so the minimum deposit required is another major consideration. Certain special checking accounts don't require that you keep a minimum balance, but you usually have to pay a flat monthly service plus 10 cents to 15 cents per check. If you write a minimal number of checks a month, this might be your best bet. Negotiable order of withdrawal, the popular NOW accounts, are checking accounts that earn interest. Actuallv, they are savings accounts on which an individual can write checks. When you open a NOW account, comparison shop. Find out: (1) What, if any, is the minimum balance required to earn interest? (2 ) Is there a service charge monthly? If so, does it vary with the number ot checks written or the minimum balance maintained? (3) How many checks may be written without a service charge? (4) If the account falls below the minimum balance, does the entire account stop earning interest? Savings accounts are more and more attractive. Passbook savings accounts are good if you intend to withdraw or deposit money with great regularity. The interest on these accounts to which you have immediate access will be lower compared to other major types of accounts. It's usually compounded annually, semi-annually or quarterly. quarter-ly. Definitely look at the interest and how it's compounded when you are choosing a passbook account. These accounts are typically federally insured or state insured, and your funds can be used as collateral for a personal loan. Certificates of deposit require a specified amount to be kept over a certain time period in a bank, savings and loan, or credit union. Certificates earn more interest than a passbook. If money is withdrawn before the time period is up, a severe penalty is imposed under federal law. Certificates of deposit recently have been the most attractive savings sav-ings option available to the average consumer, because the rates have been extremely good. U.S. Savings Bonds are conservative conserva-tive time deposits commonly known as Series EE, meaning they mature in five years, and Series HH, those which mature in 10 years. Interest is exempt from state and local income tax, and the federal taxes can be deferred until the bonds are cashed in. Money market certificates get a return comparable to T-bills. In the past they have required a minimum investment of $10,000 for six months, and the earnings were taxable. Interestingly, variants ont the money market certificate are popping up everywhere and providing provid-ing enormously popular accounts, which have greater liquidity than they've ever had before. Specifically, many new accounts offer money market rates with full liquidity; that is, you can withdraw your money when you want and still receive federal insurance all the time you are getting higher interest. It used to be that checking and savings accounts were standard from institution to institution. This is no lor.ger the case. The current mode of deregulation in the banking industry means a consumer must pay careful attention in making the decision about which program you use for your money. Remember, your knowledge is the best consumer protection. |