Whether you pay a bill, get a paycheck or make any other number of transactions, some of your financial life depends on doing business with a bank. But what type of account or other banking options are best for you? There can be a dizzying array of choices, but it is possible to cut through the clutter and find the right solutions for your needs.  

Know Your Accounts 

Picking the right account can help you better manage your money. The first step is to identify your needs. Are you looking to save long term? Do you need to be able to withdraw money easily? Knowing what you need will help you know what to look for when reviewing your banking options. Common choices include:  

• Savings account: People use these accounts to set aside money that will earn interest while they save for near- or long-term goals or to park an emergency fund. Savings accounts are typically easy to manage, but make sure you are aware of any account limits and fees.  
• Checking: Another common option, checking accounts are used to deposit the checks you receive, write checks to cover your bills or make payments or withdrawals through a debit card.  
• Money market account: A lot like a savings account, but you typically earn a higher interest rate. However, the number of withdrawals you can make each month may be limited and there could be minimum balance requirements.  
• Certificate of deposit, or CD: With a CD, you must leave your money in the account for a minimum period, which can range from a month or longer. You’ll earn more interest than in a savings or money account, but you could face a penalty if you need the money before the CD term is over.  

• Retirement accounts: Individual Retirement Accounts (IRAs) and similar choices offer tax advantages when saving for retirement.  

Banking Best Practices 

When researching your options, there are some key things to keep in mind:  

• Ask about account fees. There may be charges for opening or maintaining any of these accounts. In some cases, the fees are waived or reduced if you maintain a minimum balance, link your accounts, opt out of receiving paper statements, use your debit card a lot, or for a variety of other reasons, so be sure to read all the rules and evaluate your options. And remember, it never hurts to ask! Some banks may waive certain fees or minimum balances.   
• Shop for yield. You want the highest interest rate possible on your accounts without having to pay hefty fees or deal with tough balance or other requirements. Comparing rates and other details can help you find the right balance.  

• Consider online choices. In doing your research, don’t forget to include online banks to see if they have attractive rates or accounts that may best meet your needs.  
• Let the bank do the work. Tired of managing your banking needs? Banks offer many solutions. Set up automatic payments for regular monthly bills and arrange to have your salary or other payments deposited directly to your account. With an automatic savings plan, an amount you choose is transferred from checking to savings each month, making it easy to build your nest egg.  
• Avoid ATM charges. Look for accounts that don’t charge for withdrawals from another bank’s ATM and that refund the other bank’s fee for ATM use. If that’s not possible, plan ahead so you can make trips to the ATM.  

Remember, your financial life is going to change over time, so your banking needs may change too. If you need additional help and guidance, talk to your local CPA.