Finance 101 - Basic Banking Products & Services

Posted on March 19, 2007 in Money Matters by byronb

Stepping out into the world of personal finance can be daunting. But don’t despair. There are some practical ways that you can get the most out of your banking experience. In this article, we will discuss some good products to have when you are starting out, as well as some things to watch out for.

First, you need to determine where you would like to open your accounts. Choose a bank that is close to your home or work. It will be much easier for you to make deposits and cash checks if it is in a convenient location. Check with friends and family to see where they do their banking and whether or not they are pleased with the service they receive. Another good idea is to go into the branch and talk to the staff. If they seem pleasant and friendly, it may be a good choice. They should offer a variety of accounts and be willing to explain all of them to your satisfaction.

Once you have determined where you would like to bank, go and talk to their account specialist. His or her job is to set you up with the products that will most benefit you and your unique situation. He or she is the expert and should recommend an array of products and services. You are, of course, able to pick and choose what you are most comfortable with. If you are very new to banking, start out with a simple checking and savings accounts and add products as you feel you are ready.

Most banks offer a free checking account of some sort, and will usually recommend that you start a savings account as well. Some will require you to have direct deposit, while others may ask that you do your transactions through the ATM (automated teller machine). Make sure you understand the terms of the account before you open it, or you may end up with some unexpected fees.

When you open a checking account, make sure that you religiously update your check register. You are responsible to know what is in your account at all times. If you make a mistake, it is much easier to find it if you keep good records. Banks are also much more sympathetic if you keep a good register.

When you open a checking account, you should always sign up for overdraft protection. There are no exceptions to this rule. Overdraft protection is invaluable, as it can save you hundreds of dollars in fees for a small clerical error. This product comes in the form of a credit card attached to your account, a separate line of credit, or even your savings account. You pay a small fee when you use the service, but it is absolutely worth it.

Almost all financial institutions offer package deals. The more products you open with them, the better the deal you will get. For example, if you have your mortgage or car loan with a bank, they will offer you a checking account with more perks, such as free checks or a safe deposit box. Always ask about packages if your banker does not offer it.

Online banking is a great service. It is a way to keep track of your accounts on a regular basis from the comfort of your own home. All banks have a telephone banking service, but it can be time consuming to wade through the automated process. When you use online banking, you can see all your accounts at a glance. You can transfer funds between accounts, check balances, see what transactions have taken place, and even pay your bills. Banking online is a safe, secure way to monitor your accounts.

Starting a bank account is an exciting process. If you get all the facts and make sure you have a clear understanding of all of the terms and conditions of your new accounts, it can be very rewarding.