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Choose bank account: Selection

By Marcie Geffner ·
Tuesday, August 28, 2012
Posted: 6 am ET

If you're shopping for a new checking account, you'll need to research how you'll make deposits and payments, how you'll monitor your balance and how much you'll pay in fees and more.

Gathering that information is a good start, but once the facts are in, how do you choose which account is best for your needs?

These steps, recommended by the Federal Deposit Insurance Corp., or FDIC, might make your decision easier.

1. Compare several banking institutions. Fees vary considerably from bank to bank, the FDIC says, so it's important to do some comparison shopping and try to predict how much each account could cost you. Research each bank's fees and account terms. Compare the products and features offered on the banks' websites to information you receive in person or by phone. Keep in mind that some offers might be available only through certain branches or online.

2. Be wary of rewards and special offers. One-time or short-time deals that offer you cash, a bonus interest rate or merchandise might not be a good way to select a bank account because those benefits are temporary, the FDIC says. A better approach is compare the regular terms and conditions of accounts at various banks.

Consider also the requirements to qualify for a reward or special offer, and determine whether those rules are consistent with how you typically manage your finances. Be especially cautious if a reward is based on making purchases because that might encourage you to overspend.

3. Make sure your deposits will be federally insured. The FDIC guarantees deposits up to $250,000 per depositor per institution, including principal and accrued interest. If you have less than $250,000 in any one bank account, you'll have the peace of mind of knowing your funds are federally insured, and you could be made whole if the bank failed. There is no additional cost to you for this protection.

This is second of a four-part series. Next: Switching to a new bank. 

Follow me on Twitter: @marciegeff.

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