The short version
- Checking is for everyday spending; savings is for setting money aside.
- Ask about every fee before opening an account.
- Deposit insurance has limits and rules.
Common terms
- APY: annual percentage yield, the yearly rate including compounding.
- Minimum balance: the amount some accounts require to avoid a fee.
- Overdraft: spending more than the balance.
Fees to ask about
- Monthly maintenance fees.
- Overdraft and insufficient-funds fees.
- Out-of-network ATM fees.
Deposit insurance
Banks insured by the FDIC and credit unions insured by the NCUA protect deposits up to set limits. Their websites explain the rules.
Questions to ask a bank
- What fees could apply to this account?
- How do I avoid them?
- Where can I read the full account disclosure?
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