- The pendulum has swung back to favoring the customer when it comes to dealing with banks. Remember getting a gift from the bank when you opened an account? It used to be something like the proverbial toaster, or a small piece of luggage, or some desktop trinket. During the internet mania, it was a cash bonus - both the new online banks and traditional institutions would literally pay you to open a new account with them. And it seemed that fees were only going to get lower as banks competed for the privilege of holding onto our money. After the stock market bubble burst, however, those bonus offers mostly disappeared. When the economy soured, fees soared. Well, recently I've noticed that banks are competing for our attention again, offering free checking and cash bonuses or gifts to attract customers. So if you're despairing over abysmal interest rates on your savings or still paying monthly service fees it's time to search out a better deal!

- Checking Accounts: There are two kinds of customers at a bank - those with money and those without. Face it, it's easier to get a good deal when you're in the first group. But you should still be able to avoid monthly service charges on a checking account. You may have to give up earning interest on your account, but at the interest rates banks pay today, that isn't such a big loss. In my opinion, it's a complete waste of your money to pay a bank any kind of fee for a checking account. This includes monthly service charges, charges assessed per item processed, an annual charge for an ATM card, and charges for online banking or bill paying. If you don't have much money to begin with, you certainly don't want the bank to take any of it!

Cardinal Bank is offering an incredible number of free features on their checking account. According to their website, their "Totally Free Checking" account includes not only unlimited check writing with no monthly fee or minimum balance, but also free online banking and limited free online bill paying, free overdraft protection with a linked savings or line of credit account, and a free gift when you open an account with only $100.00 to start.

Traditionally, the easiest way to avoid fees was to maintain a minimum balance in the account. Those minimums have gotten higher and higher as banks looked for ways to generate more income. If you have other accounts at the same bank, such as a CD or any investment or loan accounts, or accounts for your business, or an IRA, ask the bank if they will voluntarily waive the monthly service fees. Be sure to ask if the minimum balance requirement can be waived if you are a senior citizen or student. One of the things you can do is offer to refinance your mortgage and transfer it to the bank where you want to have the free checking account. With luck, you'll save money on both of them!

Of course, if you can keep several thousand dollars in the bank, you'll have more options. One of my clients asked her bank to agree that there would be no fees of any kind on her account and the bank did just that, simply because they wanted to keep her as a customer. (It helped that she had a large mortgage with them, and was in a position to recommend the bank to her clients!) Banks now evaluate your "relationship" with them and offer you a better deal when you have multiple accounts. For instance, Virginia Commerce Bank's "Medallion Checking Account" is available to customers who have at least $15,000.00 on deposit with the bank. The checking account has no minimum balance, AND earns interest at what Virginia Commerce bank advertises as "an above market rate." In addition, they give you a free order of checks, a free small safe deposit box, and other perks. And according to the flyer I received, they are offering a $100.00 bonus to open the account before October 31st, 2003.

- Savings Accounts: With savings accounts paying interest at less than 1% in most cases, it hardly seems worth it to put the money in the bank! Online banks may offer better rates than traditional banks. Check out ING Direct's Orange savings account, currently offering a 2% APY.

CDs generally offer slightly higher rates than savings and money market accounts, but if interest rates rise in the future, and it seems impossible that they won't, then your money will be locked up in a CD at the old low rate. One option is to look for is a CD with no penalty for early withdrawal, such as Virginia Commerce Bank's "No Penalty/No Risk" CD which allows one withdrawal without penalty. This means you can decide to transfer all or part of the funds in your CD to a new CD with a better rate in the future without losing any of the interest earned or paying a penalty for early withdrawal.

Virginia Commerce Bank:

http://www.vcbonline.com/personal/rates.shtml

If you want a traditional CD, or a money market account, consider getting it from a non-traditional source. The new trend in financial services is to offer one-stop shopping. You can now open CDs and money market accounts with credit card companies, insurance companies, mortgage companies, brokerages, and even car manufacturers! Check rates with the companies you do business with, for instance MBNA, State Farm, Countrywide, or Ford, to see if they are offering good deals. Remember though, that if you aren't dealing with a bank, your accounts may not be FDIC insured.

The important thing to remember is to shop around for the account that suits you the best, or if you don't want to switch banks, at least ASK your bank for a better deal. Account terms and the promotional deals change all the time. If you can show your banker that you can get a better deal elsewhere, they may be willing to match the terms. You're more likely to be able to negotiate with a local bank than with a regional bank. It's worth going in to see your banker at least once a year to ask them if they have anything that would suit you better. Your "relationship" with your bank isn't just about how much money you have on deposit. It's also about getting to know the people who will be in a position to help you.

Don't forget to check with your credit union to see if their rates are competitive. If you are a school, utility, or government employee, there is probably a credit union you are eligible to join. Even if you don't work in one of those fields, you may still be eligible. To help you find a credit union, the Credit Union National Association has put together a list of contacts by state at http://www.creditunion.coop/statej_o.html.

Many banks don't offer interest bearing checking accounts to their business customers. To get around this, see if you can open a money market account in the business' name. Some credit unions are now beginning to offer business accounts as well.

- Cash Bonuses: While I was researching this newsletter, I ran across two other cash bonus offers from online-only banks. If you're comfortable with not having a local branch office to turn to, check these out:

NetBank: Get a $50.00* bonus and free online bill paying, free check order, no minimum balance, and no monthly service charge when you open a "NetValue" interest bearing checking account with $1,500.00.

*Check www.quicken.com or www.bankrate.com for leads on where to find the best deals for your savings. Look for ads for NetBank or Citibank, you may see that they are offering an additional $25.00 cash bonus when you open an account by clicking on one of these ads. (Total of $75.00 from Netbank, or $100.00 from Citibank.)

- Ordering checks: Never, ever, buy your checks from a bank! Most banks make a nice profit on your order. If you aren't offered free checks with your account, order them yourself directly from a check printer such as Check Gallery, which has an introductory offer of 400 checks for $7.90. Look in the Sunday newspaper's coupon section for offers from Checks In The Mail. They allow you to order a box of 200 checks for only $3.99, with free shipping, when you order by mail. With free online banking and bill paying available, I expect 200 checks to last me nearly a decade.

If you need computer checks, visit my website, www.helpmewithquickbooks.com, and look at the bottom of the page for a link to the lowest prices I've found for computer checks compatible with QuickBooks and other accounting software.

- Online Bill Paying: If your bank is charging you for online bill payments and you don't want to change banks, you can still pay many bills electronically without paying your bank for the service. Almost all credit card companies, utilities, mortgage issuers, and many other companies now allow you to pay your bill online at their website or set up an automatic debit from your bank account or have your balance automatically charged to your credit card. While this is slightly less convenient and may not offer as many features as your bank's online bill payment system, it is usually free.

www.helpmewithquickbooks.com
Visit my website to save 10-15% off of QuickBooks prices from Intuit or find the best prices on computer checks!

Remember- the easiest way to get a lower price is to ask for it!