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Tips for your banking relationship

Managing your relationship with your bank is as important as choosing the right one in the first place. Here are some tips for making your dealings go smoothly.

Online banking

Online banking can simplify and speed up your checking account management. For example, you no longer have to call the bank or wait for a monthly statement to see if a check cleared. Instead you can log on to your account and in seconds can see if the transaction has taken place.

The benefits of online banking don't stop there. Among other things, you can pay bills, transfer money between accounts and set up e-mail alerts from your bank tipping you off to things such as when a check clears or when the balance drops below a certain level.

Bankrate.com can help you find online checking accounts with the best rates.

Protect yourself

There's no reason to be shy about doing online banking, but you must exercise caution in regard to user names and passwords so no one gains unauthorized access to your account. Be careful about e-mails you receive that purport to be from your financial institution. Make it a practice to not click on any links in e-mails that request personal information; call the bank and see if the e-mail is legitimate. The best way to access your financial institution's Web site is by typing the online address yourself; not clicking on a link. Just as you need to take steps to protect your accounts, banks also need to address the issue of account hijacking.

Whether you bank online or use more traditional methods, you need to review your monthly statements and reconcile your records with the bank's. It's always important to quickly catch any discrepancies so that they can be corrected, and to ensure that there have been no unauthorized transactions.

Financial institutions that you do business with have a lot of personal information about you. They make money by selling that information to other companies. If you don't want them to do that you need to let them know. Financial institutions are required to let you "opt out" of having that information shared with certain companies. It's not the greatest consumer law on the books, but it gives you some rights. Information banks give you about opting out may be sent with your periodic statement or by itself.

The Patriot Act

The war on terrorism is having an impact on banks. Financial institutions now are being held to higher standards with regard to verifying the identity of people who open accounts. You can expect to have to show proof of who you are and, possibly, answer some questions about the source of the money you'll use to fund the account. For more information, read about the Patriot Act and what it means for your bank accounts.

What assets are protected?

In today's banking world where the lines have blurred between banks, brokerages and insurance companies, it's important to know which accounts are covered by the Federal Deposit Insurance Corporation and which accounts aren't covered. While deposits are insured up to $100,000 per customer and $250,000 for retirement accounts, there are ways to set up accounts to insure much more money.

You'll probably never have to rely on FDIC coverage if your bank practices good financial management. You can get a good idea of an institution's financial health by checking Bankrate.com's Safe & Sound rating system. The best time to check is before opening an account, but it's smart to monitor your bank anytime.

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