Personal Banking Guide: Managing Your Finances

Are you looking for banking services but you’re not sure where to start? SuperMoney’s guides and comparison tools can help you choose the products that best suit your needs.

Checking accounts, savings accounts, CDs, and money market accounts, offer safe places to park your money, but you must shop around to get the financial products and services that work for you. Money transfer services make it easy to send money to friends and family, but some charge unnecessary fees.

If you’re new to banking, all these options and the jargon that goes with them can be overwhelming. SuperMoney’s guide to banking will help you get started.

Checking accounts — The banking workhorse

You need a safe place to deposit your monthly income and from which to pay bills. However, not all checking accounts are made equal. You can waste a lot of money on fees and unnecessary fees if you don’t shop around. Here are some tips to consider.

Choose a checking account with no monthly fee that helps you avoid overdraft fees

Although you may have to look around, checking accounts with no maintenance fees do exist.

Start looking in online banks, credit unions, and small banks (in that order)

Online banks, credit unions, and small banks typically have the lowest fees and highest APYs when it comes to checking accounts for low- and middle-income consumers.

That doesn’t mean you should skimp on security. Make sure the bank you choose is fully insured by the FDIC (The Federal Deposit Insurance Corporation) or the NCUA (National Credit Union Administration). These institutions insure banks and credit unions. If the bank goes bankrupt, your accounts are insured up to $250,000 per account.

Don’t keep too much money in your checking account

Limit the money in your checking account to what you need to pay bills for a month or two. The rest you can invest in a savings account, CD, or money market account. High-yield interest accounts are the exception. Often they offer higher interest rates than even the most generous savings accounts.

Always keep the minimum balance to avoid fees

Some accounts offer free banking if you keep a minimum amount in the account. Notice this amount may be different to what you need to open the account.

Shop around

Fees, perks, features, and interest rates vary widely by bank and account type. Some don’t charge a maintenance fee, have no minimum balance requirements and even reimburse your ATM fees. Use SuperMoney’s checking account comparison tools to find the best checking account for you.

Savings accounts and money market funds

Savings accounts and money market fund are very similar products. The main difference is who offers them. Banks and credit unions typically offer savings accounts. Mutual-fund companies have money market accounts. However, some credit unions and banks offer both.

All things being equal money market  funds have the edge

Generally, money market funds have higher rates. In 2018, the average money market fund had an APY of 0.15%, which was nearly double the average APY for savings accounts (0.08%).

Some money market funds also offer tax-free interest accounts and free check-writing, as long as the check exceeds the minimum amount (often around $250).

Keep an eye on fees and hidden costs

Interest rates on savings accounts are low. Even a few small fees can eat up the interest you earn.

There are many types of savings accounts. Check our expert guide in savings accounts to see which one fits your needs best.

Certificates of deposit (CDs)

Are you in search of a low-risk way to build your savings? If so, consider a certificate of deposit (CD). A CD is a bond issued by a bank. It’s like a savings account but it offers a fixed interest rate for agreeing to lend your money to a financial organization for an agreed number of months or years. It comes with a guaranteed return and earns higher interest rates than most checkingsavings, and money market accounts.

However, certificates of deposit or CDs do come with additional fees you don’t have to worry about with savings accounts and money market funds. For example, you may have to pay a penalty for withdrawing your money early.

Money transfer services

Money transfer services have changed dramatically in the last few years.

Whether you’re trying to transfer money to your friend sitting next to you or a loved one who lives overseas, several money transfer companies can make the process quick and inexpensive.

It’s come to the point that it often no longer makes sense in most cases to do a wire transfer through your bank or credit union. Here is a review of the best money transfer services you should consider.

Next step

Whether you’re hunting for a high-yield savings account, a zero-fee checking account or a killer certificate of deposit (CD), we will help you make sense of your options.

SuperMoney’s comparison tools help you shop around for the best banking services and products for you.