What to look for in checking and savings accounts

Your checking account should be:

1. FDIC insured
2. Free
   • No account fees
   • No charges for ATM withdrawals (from the bank and reimbursement from other banks)
   • No subscription fees

In addition, your account should have:

1. No teaser rates, no hidden fees
2. Robust free online resources and features including online banking, online bill pay, mobile banking and the ability to link to services like Apple Pay and Google Pay
3. No minimum balance requirements
4. Debit card with zero liability and fraud protection
5. Open with as little as $100

Estimated value to an individual

• The average person can typically save up to $500 per year with their checking account decisions. A substantial portion of this savings is often in:
  • Eliminating ATM fees (from your bank and from other banks)
  • Earning cash back on your debit card
  • Eliminating hidden / other fees

• The key factors in determining your savings are average balance, how often you use an ATM card, and how often you use a debit card.

Your savings account should be:

1. FDIC insured for the full amount you deposit
2. Free
   • No minimums
   • No fees
   • No transaction limits

In many cases this can be accomplished by simply holding your savings in your checking account. Today, most people do not need a separate checking and savings account.

I find that the most financially successful individuals train themselves to hold a respectable balance in their checking account. Zero is never their zero.

The problem (and hidden cost) with two accounts is that you are more likely to hold the wrong amount of cash (too much or too little).

Other considerations

Holding the right amount in cash (not too much and not too little) is the top priority.

• I can guide you with specific recommendations when you get my detailed plan.
• You can read more about how much to keep in cash:
  • when you are working here
  • when you are retired here

Do not take risk with your savings. This is your safety net.

In the current environment, how much you earn (the yield) on your checking and savings is not very important. This will not materially impact your long-term financial success.

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