credit & debt

What to Look for in a Checking Account

If your bank doesn't offer these things, you might consider looking elsewhere.

With bank fees on the rise, more and more Americans are considering switching banks. According to a recent poll by Bankrate.com, 72% of Americans said they would consider moving their money to another financial institution if their bank hiked its fees.

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If you're searching for a new checking account, Kasasa.com recently released a list of what to look for in an account. Kasasa.com is a national brand of free checking and savings accounts offered by community banks and credit unions. Many large banks no longer offer these things, so that's why it's important to review what an account actually offers before signing up.

Free checking. Gone are the days when free checking was commonplace. Only 39% of banks now offer checking accounts with no fees or minimum balance requirements, according to Bankrate.com's 2012 Checking Survey. Big banks, in particular, have been imposing fees on formerly free checking accounts in an effort to recoup revenue lost as a result of recent regulations that limit overdraft and debit-card swipe fees. Community banks and credit unions are more likely to offer free checking. According to the Bankrate survey, 72% of the largest credit unions offer free checking.

No minimum balance. The average amount banks now require customers to keep in their accounts to avoid fees is $723.02 -- up 23% from 2011, according to Bankrate.com. Look for banks without balance requirements or that waive them if you sign up for other services, such as direct deposit.

Nationwide ATM network. If you're afraid to switch to a community bank or credit union because you think you won't have access to a nationwide ATM network, think again. Many belong to the surcharge-free Allpoint network, which has 43,000 ATMs nationwide, so you won't get hit with fees when you don't use your bank's ATM. Or find a bank that will give you a refund if you use an out-of-network ATM. Banks that provide Kasasa accounts offer ATM refunds.

A decent yield on interest checking. As yields on interest-bearing checking accounts have declined, the requirements to open these accounts and avoid fees have become tougher, according to Bankrate.com. On average, you need about $500 to open an account and a minimum monthly balance of more than $6,000 to avoid fees. Kasasa's free checking accounts offered by community banks and credit unions have a base interest rate that customers automatically receive without having to meet a balance requirement. The rate rises, though, when customers do meet qualifications such as receiving electronic statements and using direct deposit. And many of the accounts Kiplinger's lists in our 7 Credit Unions Anyone Can Join slide show are interest bearing and don't have a minimum balance requirement.

You can search for a community bank near you at the Independent Community Bankers of America site and look for credit unions at www.culookup.com or www.asmarterchoice.org. If you find an account that offers the attributes listed above and you're ready to make a move, see Switch to a Bank With Lower Fees for tips on making a smooth transition.

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