Choose the Right Banking Account for Your Needs

I just saw the commercial of that bank down our street. It is offering a free bank account! Lets take it, my wife cried out. It sounds like a great idea but before you go sign up for that account and start banking with any specific bank you should know that bank accounts are not one size fits all.

When you understand the different types of bank accounts you can actually make your money work for you in the best possible way.

Different Types of Bank Accounts

The accounts offered on those commercials are usually the checking accounts. These are the most common type of bank account as they allow you to withdraw money from your account by writing checks and with a debit card.

People generally consider this as a great option as they get access to their money without having to jump through hoops or wait for a check to be cut, etc. Some checking accounts pay interest, allowing you to take advantage of average daily balances, but most typical checking accounts, also known as a demand deposit account, will not pay interest.

Money market accounts are those that offer interest on the accounts. It also allows you to write checks on it. A money market account allows for you to benefit from a higher rate of interest than your typical savings or checking account, but they do require that you have a higher minimum balance than you would have to have with other accounts.

Withdrawing funds from these accounts are not as easy as it is with a checking account. But you can still write checks on these accounts. In addition, there are usually more fees associated with this type of account, making it a good option for those that don’t necessarily need to access the cash.

One common type of account is the savings account. This is the type of account that most people use to keep the bulk of their money in. The difference is not having the benefit of being able to write checks. The benefit of interest still holds in these accounts. You may be limited as to the number of withdrawals or transfers that you are allowed to make each month and if you go over you may be charged a small fee.

Some of the other options include time deposit accounts, or certification of deposits or CDs. These accounts offer guaranteed interest rates and allow for the account holder to choose how long they would like their money to be on deposit, you can generally choose anywhere from a few days to a few years.

This account is not appropriate if you want to access the money but if you are looking to earn a high rate of interest on a specific amount of money then it might be the ideal type.

As you can see, there are many different account types for you to choose from. There are various choices of accounts that you ask your bank and then choose from them. If you still aren’t sure let them know what you will be using your account for and they will likely be able to help you make the right choice for your financial needs.

See how to do Linear Regression for determining what part of a mixed cost is a Fixed Cost and what part is a Variable Cost. Also See how to create a Scatter Diagram and add Trend Line. Excel Magic Trick # 265: Cost Accounting Linear Regression (Excel Magic Trick #265) This video is for a Highline Community College Cost Accounting Class. The SLOPE (m) function calculates the slope of the linear equation y = m*x + b The INTERCEPT (b) function calculates the intercept of the linear equation y = m*x + b The RSQ (r^2) function calculates the Coefficient Of Determination (how much influence x has on y) The symbol carrot ^ (Shift + 6) is used for exponents The ROUND function must be used when: 1) multiplying decimals; 2) you are required to round (money requires that you round because the smallest unit is a penny); 3) you will use your formula results in subsequent formulas To see how to use the Excel Add-in Data Analysis feature, see this video: Stats 08: Install Excel 2007 Data Analysis Add-in
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The Painless Guide to Switching Checking Accounts

The thought of trying to move your money and automatically scheduled bill payments from one checking account to another is often enough to prevent people from changing checking accounts. It may be easier to just stick with what you’ve got, but if you want to maximize your earnings or benefit from features offered through another banking institution, you’ll have to be willing to do a little legwork to switch your money and any automatically scheduled payments from one checking account to another. While it may seem overwhelming at first, you can just follow this guide for virtually painless switching of checking accounts – and you’ll be set up in no time!

Step 1: Review The Previous Month’s Statement for Automatic Payments

If you have online banking with your current checking account, log in and view last months transactions. If you don’t have online banking set up, get out your paper statement for the last month. Make a list of any payments that are automatically deducted from your checking account (meaning you do not physically write and send a check or initiate the online payment yourself).

Make another list of any items that you regularly initiate an online payment for – these are transactions that don’t occur automatically, but you don’t write checks for them either. You’ll need to update your payment information in the online accounts of these creditors in order to continue making your payments through this method.

Step 2: Direct Deposits and Automatic Savings Transfers

Make another list of all income sources that are directly deposited into your checking account. Typically this would be your payroll direct deposit from your employer; but may also include child support or other direct deposit transactions.

If you have set up an automatic savings plan through your checking account, you will want to write down the details as well, so you remember to cancel the automatic transfer from checking to savings and to set it up again with your new checking account.

Step 3: Open the New Checking Account

Open your new checking account with a small deposit to get it set up if your funds are limited; if you have access to a sizable amount of money you can make a larger deposit and immediately start setting up your automatic bill payments again through this new account.

Order your checks if you use physical checks, and take note of the routing and account numbers for your new account. You will need this information to start transferring your automatic payments, direct deposits and automatic savings transfers.

Step 4: Cancel Automatic Payments and Savings Transfers

From the lists you’ve created, contact each of the creditors who receive their payment automatically through your old checking account. If you don’t have a lot of money in the newly opened account, simply cancel the automatic payment and inform them you will be mailing your next payment manually. If you were able to open your checking account with a good amount of money, you can just switch the payment details from your old checking account to your new checking account without interrupting the automatic payment plan service, and avoid having to mail a check manually.

If you have an automatic savings transfer, you can choose to temporarily stop it while you are setting up the new checking account or again, if you have enough money in the new account already simply switch the details to the new account and resume making your automatic savings transfers through the new account immediately.

Step 5: Change Payroll Direct Deposit

Once you are sure there are no more automatic payments and savings transfers coming out of your old checking account, you can switch the payroll direct deposit (and any other sources of income that gets directly deposited) into your new checking account. Sometimes this takes one to two weeks to make the change, depending on the employer and the payroll department.

Step 6: Set Up Automatic Bill Payments and Savings Transfers

As soon as you see your first payroll direct deposit going into the new checking account, you can refer back to your list and re-set up the automatic bill payments again if you weren’t able to do that at the same time as opening the checking account.

You will also be able to automatically transfer your money into your savings account once you set it up to withdraw from the new checking account.

If you had creditors and expenses that you would log into the website and initiate a payment, now is a good time to log into each of your accounts and update the payment method section of your profile. This will tell the account where to pull the money from – and you’ll be able to specify your new checking account details for making payments here on out.

Step 7: Close the Old Checking Account, Enjoy the New One

After you’ve changed any automatically made transactions through the old checking account, verify that any outstanding checks or payments you’ve initiated have all cleared. As long as all transactions have posted to the account, at this time you should be able to safely close your old checking account and begin using your new checking account exclusively.

Ken Boyd, owner of St. Louis Test Preparation (www.stltest.net) presents part one of his course on Understanding Cost Accounting. Boyd points out that students can have success with Cost Accounting concepts by making connections to actual examples from business. As a former CPA, College Accounting professor and auditor, Ken has a wealth of experience to bring to the subject.
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