The banks are trying very hard to tempt us to open an account with them. Some offer advanced technological tools for managing the account, others offer good savings conditions, and some offer loans and credit with special terms to soldiers, service members or students. Before getting confused, it’s important to follow a few rules.
Choose the bank that’s right for you
Before you decide which bank to open an account with, conduct market research and check which bank offers you the best terms tailored to your needs. Today it is possible to manage a bank account remotely (from the Internet, by phone or fax), and the location of the branch is less important. More important are the conditions that the bank can offer. Also, remember that there are no free gifts, and don’t be tempted to open an account just because of the gift you’re offered.
A bank is a business entity in every respect, and it charges a fee for transactions carried out in the account. Sit down with the bank clerk and find out how much fees you will be required to pay for each transaction: (withdrawing cash, depositing and withdrawing checks, etc.). Most banks grant exemption from fees to soldiers/students/service members. With financial institutions it is worth bargaining, those who bargain profit.
How do I manage an account?
After you have conducted market research and chosen the bank that suits you – come to the bank branch with an ID card. The clerk will open an account for you, sign you forms, go over the terms of the account and issue you an account number – from now on you can deposit money and withdraw money from the account.
Keep a copy of the forms for opening the account – this is a contract in every respect. Also, make sure to get a written copy of every promise you make orally (a fee-free account, for example). Ask about the different channels for managing your account: branch outreach, web, mobile app.
And finally, if you don’t understand a term or concept that the clerk is talking about – ask! It’s about your account and your money. If you don’t ask – how do you know?
Prefer debit card over credit card. The transactions on this card are charged immediately, that is, every transaction that is made is deducted at that moment from the account. When the balance in the account is zero, and there is no money left in the account – the card is blocked. Using a debit card forces you to live off what you have and not use the money you don’t have right now.
Even if you’ve been promised a “fee-free account,” keep in mind that this refers to fees for checking account transactions (i.e. cash withdrawals, check deposits, etc.). Exceeding the credit limit and debit and credit card usage fees will incur fees.
Credit Facility and Loans
Credit line – A credit line is a fixed limit for overdrafts and allows you to pay with the money you don’t have. Not many people know this, but the credit limit costs you money even if you don’t use it, and a minus is a loan for everything that pays quarterly interest on it.
We recommend not setting a credit line and not living in overdraft. Minus is like a snowball – it can grow from month to month while your income remains constant. In such a situation, you may reach the credit limit limit, and you may even need to take out a loan. From such a deterioration it is very difficult to get out.
Don’t take out a loan! Most banks allow you to take out loans in fairly high amounts, but you should always remember that loans must be repaid at the end, and that repayment of the loan involves interest payments (this is actually the bank’s profit from the loan it gave you). In our experience at Paamonim, young people who take out loans find it difficult to repay them, and with age and with the establishment of a family, the volume of expenses increases and financial liabilities increase. Financial debts do not allow families to live in financial comfort and balance. Live off what you have, and don’t withdraw money from your account when you know there’s no money in it.
In any case, before making such a decision, consult with experts. You can always consult bell experts for free.