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FDIC Consumer News - Summer 1998
|How to Be More at Home with
Your Bank Youre not married to your bank, but you can enjoy a nicer long-term
relationship if you try our tips for getting attractive interest rates, low fees and solid
Chances are youre pretty satisfied with your bank and youve been a loyal customer for years. But as with any place you do business, theres always something you can do differently or better to make you feel more comfortable and more at home...and perhaps save some time and money, too.
FDIC Consumer News wants to help. We think that if you do a little homework and make an extra effort, you can get more of what you want from your bankincluding attractive interest rates, low fees and speedy attention to your problems and concerns. Thats why weve put together the following 10 tips, which you can put to use in your dealings with any depository institution:
1. Ask yourself, and your bank, if youre getting the best deal. About once a year, talk to a customer services representative at your bank to make sure youre signed up for the right programs to meet your needs. Maybe a simple adjustment to your banking practicessuch as having your paycheck automatically deposited into your checking accountcan get you a higher interest rate or reduce or eliminate certain service charges. Perhaps a change in your banking habits, such as those described on Pages 5 and 6, will help cut your fees. Maybe your good track record at the bank will qualify you for a lower interest rate on a loan or credit card. Or maybe theres just a new or better account that you didnt know about. I asked at my bank how I could get a better deal on my checking account because I was paying a minimum balance fee and receiving no interest, says Ed Silberhorn, a consumer affairs specialist with the FDIC in Washington. I was told that because I had additional funds in a money market account I was now eligible for an interest-earning,no-minimum balance checking account. Thats a good deal, but I wasnt aware of it until I raised the question.
Every three or four years (if not more often), comparison-shop to make sure you couldnt do significantly better at another bank. Start by jotting down the products and services you really usemost likely checking, ATMs and one or two others. Make a note of the interest rate, minimum balance requirements and so on. Then go to your statements for the last year or so and tally up the fees and penalties you typically payfor monthly account maintenance, ATMs, bounced checks, etc. Now compare your bank with three or four others. You might discover that you can earn or save hundreds of dollars by using another bank. Or, better yet, you may find that your own bank still offers a good value or that it is willing to make concessions to keep you as a customer. Then theres little reason to go through the trouble of switching banks. (If you decide to leave your bank, see our tips.)
2. If deposit insurance is important to you, make sure your funds are fully protected. Peace of mind is important. Its true that bank failures are few and far between today, but that wasnt the case just a few years ago. And even if just one bank fails... what if its yours? First, be sure that your deposits are in a federally insured institution. While most banks and savings institutions are federally insured, a few are not (including some far-away institutions that offer high-rate accounts in the newspaper or over the Internet). FDIC-insured institutions must display an official sign at each teller window or teller station. Also, you can verify whether an institution is FDIC-insured by calling our Division of Compliance and Consumer Affairs (DCA) at the toll-free number listed, or by going to the FDICs Internet site.
The FDIC protects bank and savings association depositors up to $100,000 at each institution. But depending on how your accounts are structured, you can even have hundreds of thousands of dollars in one bank and still be fully protected. You dont need to worry if you or your family have less than $100,000 in all your accounts at the same bank. But if your combined accounts total $100,000 or more, make sure theyre within the insurance limit. If you have questions, speak with a DCA deposit insurance specialist. Remember, too, that FDIC insurance covers only deposits. Mutual funds or annuities you buy at your bank are investments, not deposits. Thatswhy theyre not insured against loss by the FDIC. Questions about federal deposit insurance at credit unions should be directed to the National Credit Union Administration.
3 Simplify your life. Your bank can arrange for the direct deposit of your pay and benefit checks and other regular income. Most experts agree that direct deposit is safer and more convenient than paper checks. There are no delays in getting funds deposited because checks arent lost in the mail, forgotten at home or waiting for you to return from vacation. As mentioned previously, you might even get a break on your checking account if your paycheck is deposited electronically.
You also can have your bank automatically make some of your regular payments, such as your mortgage, health insurance premiums, utility bills and investments in a mutual fund. That can be an easy, economical alternative to writing and mailing a lot of checks each month. Also think about doing other banking the high-tech way, such as withdrawing money from ATMs instead of standing in line at the branch or rushing to get to the branch during banking hours. Consider using a debit card or check card to pay for purchases from your checking account without writing a check. Banking from home, by phone or computer, also can be a time-saver.
4. Get to know bank employees you can turn to for help. Jot down the names and numbers of employees who, in-person or over the phone, seemed to be especially helpful and knowledgeable. If possible, become a familiar voice or face to them. Why go to this trouble? A good teller, branch manager, customer service representative, loan officer or supervisor can help get your questions answered and your problems solved. They may even come to your aid in a financial emergency, especially if they know you and that youve got a good relationship with the bank.
6 Dont be afraid to complain. No bank employee really enjoys hearing from a disgruntled customer. But your banks managers probably would prefer you bring a problem to their attention and be given the chance to fix it rather than take your business elsewhere or tell all your friends about that lousy bank. If you dont get satisfaction from a customer service representative or another employee, consider talking to a supervisor...or even one of your banker buddies mentioned in the previous item. And if youre still having problems, consider contacting the institutions federal regulator. (For more tips on how to resolve a dispute with your bank, see our story.)
6. Dont be afraid to ask for a break. Bounce a check for the first time ever? Want a copy of an old monthly statement? Think the fees for your mortgage application are a bit steep? Depending on the circumstances, your bank might be willing to reduce or waive a fee or penalty, especially if youve been a good customer and dont have a history as a repeat offender. Also consider talking to your banker if youre having problems repaying your bank loan. Explain the situation and any unusual circumstances. Many lenders will agree to temporary or permanent reductions in your loan interest rate, monthly payment or other charges. Again, it helps if youve had a clean record in the past.
7. Read your monthly statements. Your bank statements, credit card bills and other mailings from your bank may not make for exciting page-turning but they can be among the most important literature youll read. Tucked inside any envelope from your bank could be your only notice about new fees or penalties for certain accounts. If youre not aware of these changes and you dont notice the higher fees on your next monthly statements, you could end up paying more for your banking and not even realize it.
Also review your bank statement as soon as possible after it arrives to make sure there are no unauthorized charges. If you suspect that a thief has used one of your checks or your credit card, go right to the phone and call the bank. FDIC attorney Mark Mellon explains that under most state laws, youre required to exercise reasonable promptness in examining any bank statement that shows payments from your account. He says failing to promptly notify the bank about a forgery could be grounds for holding you negligent and liable for the loss.
How quickly you report a problem with an ATM card could be especially important in limiting your losses. Under the Electronic Funds Transfer Act, your maximum loss is just $50 if you report your ATM card lost or stolen within two business days of discovering the problem. But if you wait between two and 60 days, you can be liable for up to $500 of what a thief withdraws. Wait more than 60 days after receiving a bank statement with an unauthorized ATM transfer and you may be responsible for all the money withdrawn. (Youre not responsible for funds withdrawn after you notify the bank that the ATM card is lost or stolen.)
Heres yet another good reason to look at your bank statement as soon as possible: to make sure you have enough in the account to avoid bounced checks.
8. Read the fine print. Knowing the costs and requirements of an account before you sign on the dotted line can prevent a complaint or hassle later. Example: Just because an account is advertised as free or no cost doesnt mean youll never run up a cost. Under Federal Reserve Board rules, an institution cant advertise a free checking account if you could be charged a maintenance or activity fee (such as for going below a required minimum balance). But your bank can offer a free account and still impose charges for certain services, such as check printing, automated teller machines and bounced checks. Also be very clear about whether an attractive interest rate on a credit card or a deposit is just a short-term, introductory teaser rate good for just a short time.
9. Keep good records. Alan Cox, a consumer affairs specialist with the FDIC in Washington, says you should hold on to your receipts for deposits, ATM withdrawals, credit card charges and other transactions long enough to confirm that your monthly account statements are correct. (Later its OK to toss these pieces of paper in the trash but be sure to rip them up enough so that a thief cant read or use them.) Cox also suggests that you keep copies of any contracts or other documents you sign with the bankloans, certificates of deposit, etc.along with any accompanying handouts. If theres ever a dispute or a discrepancy, he says, youll have those documents to refer back to.
10. Use your bank as an information resource. A good banker can be an excellent source of advice and informationperhaps about starting or expanding a business, buying a car or home, qualifying for a loan or dealing with a debt problem. He or she also might be able to direct you to good contacts in other businesses or have excellent reference material handy. All of this is yet another reason to get to know the right people at the bank.
Your bank also could have a customer newsletter or an Internet site that provides useful tips for handling your financial affairs. Many banks also offer seminars on topics such as saving for retirement or a childs college education. Add this information to everything else you learn from your lawyer, accountant, financial planner, the media and other sources, and then put it to use when shopping for or using financial services. And anything you can learn from the bank about your rights and responsibilities as a consumer can help you avoid misunderstandings and get any problems solved quickly.
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