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Over the years, banks in the U.S. have dramatically changed how they operate and what services they offer. But their main function remains the same for most households: to serve as a hub for everyday cash flow. Paycheck received? Right into your bank account. Bills to be paid? Right from your bank account. Cash needed for the weekend? Right out of your bank’s ATM.
Given the importance of all that cash flow, you’d think we’d be picky about our bank. But it’s the opposite. Americans age 55 and up have been using their current checking account for an average of about 25 years, according to a 2021 Bankrate survey. One of the top reasons respondents give for sticking: “It’s the same account I’ve always had.” There are better criteria for deciding where to keep an account. While the interest rates you earn on deposits or pay on loans may be important, here are five other factors to consider.
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1. Maintenance fees
If a bank charges you a monthly fee for your account, those dollars can add up. The most common monthly charge is $12, according to Bankrate, or $144 a year. The average minimum balance you need in an account to get monthly charges waived is about $540.
So if you’re paying a high monthly fee for your account, you might want to look for an account elsewhere, or maybe an account at your current bank with a different fee structure. You could be required to use direct deposit or link a savings account, or you may have to pay to receive a paper statement. Certain states require banks to offer “lifeline” low-fee accounts. And the nonprofit Cities for Financial Empowerment Fund is encouraging banks to provide what are known as Bank On accounts — low-cost accounts that meet certain standards, such as an opening deposit of $25 or less. To find a bank near you offering these low-fee accounts, visit joinbankon.org/accounts.