Amazing Kids! Magazine

Choosing a Bank that is Right for You

By Ryan Traynor, Editor-in-Chief

 

You have a box under your bed where you’ve kept your holiday, birthday, and chore money. Someone just told you about interest. Interest is money that banks will pay you to keep your money in a savings account at the bank. Looking at the box, you realize that the money is not safe where it is and it certainly is not making any money. You now have decided to put the money in a bank. This way you can keep better track of how much you’ve saved and it can sit safely in an account earning interest. But, how do you choose the place to put your money? You don’t just want to pick the bank where your parents have their account. The needs of your parents are different from yours, as a kid. Think about the answers to these questions as you consider which bank to make your OWN:

  1. Does the bank offer the services you need? Think a little further ahead. Do they also offer checking accounts for teens? Do they provide secured or cosigned credit cards for children?
  2. Do they have convenient branches and ATMs? Branches are locations where you can conduct your business such as depositing your savings, cashing checks, and setting up accounts. ATMs are Automated Teller Machines where you can get cash out of your accounts, make deposits, or get information on your balance by using a debit card that is connected to your accounts. If a bank has many ATMs and at close locations, it will be more convenient to access your money and you won’t be charged extra fees for using other bank’s machines.
  3. Are they open hours that match your schedule? If you are doing after-school sports, then you’ll probably need a bank that has weekend hours.
  4. Do the employees speak your language and treat you with respect? You will have a long-term relationship with this bank so you’ll want to feel comfortable with them.
  5. Are account interest rates, fees and requirements reasonable? Do they have minimum opening balances? Do they require minimum monthly balances? Are there monthly fees? Are there fee waivers available? Are there withdrawal limits per month? If you can live with a monthly limit on withdrawals, sometimes this will give you a higher interest rate paid on your money. What are their deposit hold times? Sometimes when you deposit a check from another person, the bank will not let you take out the money for a few days until they can get the money from the bank. What interest do they pay? Don’t look at the stated interest rate. Instead, compare interests by looking at the Annual Percentage Yield (APY) which compares apples to apples taking into account when interest is paid and whether it compounds.
  6. You can access your money in a branch or by ATM or Debit Cards. Do they charge fees for their use? Can you do your banking online? Do they have the type of transactions you need to use? Are there limits on these transaction types per month?

Once you gather all this information, calculate the monthly costs and interest to be paid on your money. Remember, you not only get interest income, but you are gaining a way to track your money and keep it safe. It also is the first step to developing a relationship with an important partner in your financial future. Good luck beginning your journey!

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