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FDIC Consumer News - Summer 1998

Important Update: Changes in FDIC Deposit Insurance Coverage

The FDIC deposit insurance rules have undergone a series of changes starting in the fall of 2008. As a result, certain previously published information related to FDIC insurance coverage may not reflect the current rules. For details about the changes, visit Changes in FDIC Deposit Insurance Coverage. For more information about FDIC insurance, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342). For the hearing-impaired, the number is 1-800-925-4618.

You Can’t Expect Something for Nothing… But often you can pay less in bank fees.

You can’t expect something for nothing. After all, banks are for-profit businesses, subject to taxes and the
demands of stockholders. Still, there are many things you can do to limit the fees you pay. Here are some suggestions:

• Review your monthly mailings and see how much you’re paying in fees. Then ask your banker about ways to
reduce or eliminate those charges. If you write very few checks each month, for example, consider a cheap, no-frills checking account, sometimes referred to as a “basic” banking account. But always read the fine print and think through the costs of any move, such as what you might lose in interest by moving money from a savings account into a checking account just to meet the minimum balance requirement.

• Every few years, if not more frequently, compare your bank’s costs to those of a few competitors. You may
find a great bargain elsewhere or discover a better deal at your current bank. When comparison- shopping, concentrate on the accounts and services you actually use. Don’t be concerned about analyzing every product or fee you see listed. Also be aware that a low interest rate offered on a credit card or another loan may just be an introductory “teaser’ rate that could go up substantially after a few months.

• Your bank might give you a special deal on your checking account if you arrange for direct deposit of
your paycheck. Having funds automatically deposited into your account also can help avoid bounced checks.

• Banks want to encourage customers to do most of their banking with them, so if you have more than one
account at the bank, you may qualify for no-fee or low-fee offers. If you have money in both checking and savings accounts, ask whether the balances could be combined for purposes of meeting the bank’s minimum balance requirements.

• Look into special deals if you keep a certain amount in your account, arrange for direct deposit, or do a lot of
your banking electronically (ATMs, banking at home by computer).

• Some banks offer “clubs” with special offers or savings for certain groups, such as senior citizens. Check these
out.

• Limit or avoid “surcharges” (access fees) at the automated teller machine by using your own bank’s ATMs or
those owned by institutions that don’t charge fees to non-customers. If you do pay a fee, consider withdrawing larger sums each time so you’ll cut down on the number of transactions. (For more tips on how to reduce ATM fees, see our Spring 1998 issue.)

• If you’re a good customer with a clean record, your banker might be willing to refund an occasional service
charge for a late credit card or loan payment, a bounced check or some similar offense. You might also be able to get a lower interest rate on a credit card or other loan.

• Avoid bounced checks by balancing your checkbook regularly so you can keep an eye on the bottom line.
Jean Ann Fox, director of consumer protection for the Consumer Federation of America, says “it’s getting harder and harder, especially for people with joint accounts, to keep track of an account balance because there are so many variables beyond just paper checks.” She said, for example, that consumers should immediately deduct from their balance for ATM withdrawals, bank fees, and debit card purchases at stores.

• With “overdraft” protection, the bank will automatically honor a check you write even if you don’t have
enough funds in the account. While overdraft protection avoids bounced check fees (imposed by banks, stores,
landlords, etc.), Fox notes that the service does come with costs, so be sure it really would save you money.

• Consider buying checks from mail-order companies, especially if you write a lot of checks each month and the
cost-savings could be significant. Before placing your order, ask your local Better Business Bureau or state consumer protection office whether the company is legitimate.

• If you don’t care whether you get your canceled checks back each month, you might qualify for a special deal
on your account.

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Last Updated 12/7/2011 communications@fdic.gov