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Mellody Hobson is President of Ariel investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts.  Additionally, she is a regular financial contributor and analyst for CBS news.

Mellody: We are getting back to basics this morning, Tom. Every week on money Monday we cover a topic that can affect your bank account, but i have some things for our listeners to think about when it comes to their actual bank accounts. In recent years, we have seen banks employ a number of tactics to wring more revenue out of consumers, and these fees and penalties can really add up! So today, I have a few things for people to remember when opening a new account or evaluating their current ones.

Tom: Alright, back to basics. What should we look for before opening a new account?

Mellody: I want to break this down between checking and savings, but before I do, it is worth mentioning that you probably want to have both accounts with the same bank, and it should go without saying that you want to bank with an institution that is guaranteed through the FDIC and the NCUA– to make sure that your account is protected up to $250,000.

That said, let’s start with savings – mostly because i always like prioritize savings! The first thing to look for when thinking about a savings account is access to your funds. Our savings are for emergencies, so you need to be able to make withdrawals in the event that you get in a tight spot – whether those withdrawals are in person, or via transfers from your savings account to your checking account. In this day and age, you also want to make sure you have mobile access to your account, so you can do it when you are out of town and do not have access to a physical branch of your bank.

Finally, in terms of a savings account, check and double check the interest you will be getting on the account. As you have heard me say before, interest on a savings account is low, and therefore not a great investment strategy, but you do want to make sure that your money is not losing significant value due to inflation. Try to shoot for a rate of 0.8% or higher.

Tom: What about checking accounts?

Mellody: In terms of a checking account, your main focus should be devoted to watching out for all of the fees out there. Many banks charge a monthly fee just for having an account with them. You want to avoid these banks if possible.

Another big charge you want to ask about? Overdraft fees. After regulators tried to rein in these fees a few years ago, banks are reviving them in a big way. the median fee for withdrawing more from a checking account than a customer has on deposit increased to an estimated $30 in 2013—a record—up from $29 in 2012 and $26 in 2009. if possible, it is better to avoid overdraft protection all together, and simply link your checking to your savings account, so that it will simply advance money if you are over a couple of bucks. If that is not an option, there are banks out there that will send you an alert if you are close to over drafting your account or it looks like you are at risk based upon past spending habits.

A final note on fees: your bank you not charge you for withdrawing money from your accounts via one of their ATM’s. And if you withdraw money regularly, you may want to look for a bank with a large ATM network, particularly if you are traveling frequently.

Just as you would with savings, you should also make sure you are comfortable with the bank’s mobile platform, so you can pay bills and transfer money without going to a location.

Tom: This is great, Mellody! What else?

Mellody: A couple more things for our listeners, Tom. First, avoid checking accounts with minimum balances. These also might have fees for dropping below the required amount, and if they don’t they still prevent you from accessing that money. Not a good move. Also, don’t just consider the big or well-known banks – really look around. Local banks and credit unions may be the best deal, especially if you tend to stay in one place most of the time.

I know that doing all of this can be daunting, but there are some great tools out there that will allow you to compare interest rates, learn more about fees, and get reviews. We can make sure they are posted on Black America Web. If you take the time to do your homework on your accounts, you can put yourself on track for keeping more money in them!


MONEY MONDAYS: Checking And Saving – What To Look For In A Bank Account  was originally published on