Banking: New rules you need to know

March 03, 2011|Lynn Little

New federal rules limit the fees banks and other financial institutions can charge on some services, so it's possible that the costs of other services could increase.

Comparison shop so you don't pay more for accounts than you have to. Look at what is being offered by your bank as well as a few competitors. If your bank is among those that has eliminated free checking services, you might be able to find another bank offering them, especially if you sign up for direct deposit or electronic statements.

Whether you keep track of your account online or on paper, promptly check account statements for errors and fees that can cost you money. It's also important to review your account statement promptly to identify and dispute unauthorized transactions.

Consider signing up for electronic statements so you receive e-mail notifications when statements are available for your timely review.

If your debit or ATM card is lost or stolen, your liability for unauthorized charges is limited under federal law based on how quickly you report a problem. To get the most protection, you must notify your bank within two business days of learning that the card is missing.

If your bank has changed account minimum balance requirements ask yourself if you can get by with a "no frills" checking account. These accounts typically offer basic banking services without a minimum balance requirement or a monthly maintenance fee, but may limit the number of checks you write or the number of monthly ATM or debit card transactions.

If overdrawing your account is an ongoing problem, look into alternatives to high-cost overdraft programs. The best way to avoid overdrafts is to keep a good record of your transactions and to have enough funds in your account to cover your anticipated withdrawals.

Find out if your bank will send you an e-mail or text message alert when a significant transaction posts to your account or if your balance drops below a specific amount. This alert service, which is offered free at many banks, enables you to consider moving funds to your checking account from a savings account so you can avoid an overdraft. Talk with a bank representative to determine what less expensive options that may be available for you.  

Under rules that went into effect July 1, 2010, banks must ask customers if they want to pay for overdraft coverage for debit card purchases and ATM withdrawals. If you "opt in" to this coverage, your bank can charge you a fee to process these transactions when they exceed your account balance. If you don't opt in, expect that these transactions will be declined.  

Minimize fees at the ATM. Most banks don't charge their customers to use the bank's ATMs so try to get cash at one of your bank's machines.

When you need cash and you're not near your bank or one of its ATMs, know your options so you can avoid paying two fees, one to your bank, the other to another bank for using its ATM.

For more on how to efficiently manage and reduce costs associated with checking and savings accounts, go to the FDIC website at and the U.S. government website

Lynn Little is a family and consumer sciences educator with University of Maryland Extension in Washington County.

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