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I have worked at a bank for close to four years now, and during my time at various financial institutions, I have learned a few things about banking. As someone who works directly with customers, I get to see exactly what frustrations people are facing, what questions they are asking, and what things they just don’t understand or realize. While I can’t always help all these people, I wanted to put together this list of questions people should ask their bank before opening an account with them.
The first one is the most important:
1. What is your overdraft policy?
I’ve worked for a couple of different banks, and both banks had totally different overdraft policies. While the function of overdraft is the same, each bank puts its own terms on how much overdraft to provide their customers, what to charge for this service, etc. I’ve worked at a bank with flat numbers across the board–when a customer opened a new account they had no overdraft, then after a month they gave them $200 overdraft, then after six months they received $600 overdraft, and that’s as high as it went. The other bank I’ve worked for had a system that calculated the customer’s balances, deposit activity, and other metrics to determine how much overdraft to give that customer–and the number was constantly changing.
There are other terms your bank should describe to you when talking about their overdraft policy, such as fees (a typical OD fee is in the $30 range), amount of time you can be in the overdraft before your account gets closed, etc.
Please note, I am not encouraging anyone to use their overdraft here. One of the things I hated to see most was customers who didn’t understand how their overdraft worked, so they were getting hit with $30 fees all-the-time and they never quite got a grasp on why they were always negative. I simply want you to understand very clearly your bank’s overdraft policy before you get into a relationship with them–after all, that’s what opening an account is. Overdraft is a service that is sometimes a necessary evil, and if you need to use it, you’ll be glad to know just what you’re getting yourself into.
And FYI, you can tell your bank you don’t want overdraft at all–that is an option as well.
2. What is your post dated checks policy?
If your employer still pays you with a physical paycheck, this question could be very important to you. The first bank I worked for had the attitude of, “We don’t care what the date on the check is–if someone gave it to you, you have every right to cash it as soon as you want.” The second bank I worked for, not so much. If a check was dated for any date in the future, we were not supposed to take it for cash or deposit.
The date on your check is something you may not have even paid attention to before. But next time you receive your paycheck, take a look at the top corner. If the date is for a day in the future, say tomorrow instead of today, then that check is considered “post-dated.” If your bank does not allow handling of post-dated checks, then you won’t be able to cash your check and receive your money until the date that’s printed on the check. This can be a huge inconvenience to the customer, and something I always hated when it happened to my customers.
3. Exactly what fees can I expect?
In my experience, banks sometimes have a tricky way of explaining their fees. The new accounts rep will quickly go over some of the fees at the end of all the paperwork, right about the time when you just want to get out of there and get on with your day.
A few typical fees you need to look out for are account maintenance fees, statement fees, falling below the average daily balance fees, etc. Make sure you know exactly what you’ll be paying each month before signing any paperwork.
The bottom line is, how does your new bank make you feel? Find a bank that treats you like a person, not just another sales goal the CSR is trying to hit. The opening of a new account should be the start to a relationship that you can rely on for the many different financial needs you’ll have to come throughout the years. If you’re finding out what the overdraft policy is, the policy on post-dated checks, and exactly what fees you can be expecting from the moment you open your new account, you’ll be starting off on the right foot.