Thursday, May 29, 2008

How to Choose the Right Bank As a Teenager

As a teenager there are several factors to consider when choosing a bank. Saving money is an important skill to learn early in life; it provides you with a sense of purpose, an ability to interact with the commercial side of life and an opportunity to develop self-discipline about saving and spending money. Choosing the right bank when you are a teenager should be about complementing your needs and meeting your needs with the least amount of hassle, red tape and loss of funds through fees.

My personal choise: Savings Account
1. Consider the purpose for your account. The purpose for an account will impact on they type of account that you are looking for and it will also influence your decision whether to use a bank for short-term savings or for longer term investments. Consider such questions as:
* Do you have a summer/after school job that you need a bank account for?
* Do you want a checking account, or a savings account?
* Do you want to save your money, or just keep it safe until you spend it?

2. Do your homework. Check out the banks in your area, and research which ones offer better packages for an account. One bank might give you a check account complete with a check book; yet another might give you a special credit line. The important things to look for include:
* What are your spending and saving needs? Does the bank match these?
* Are the options offered by the bank likely to encourage saving or discourage it?

3. What are the bank's fees? These can sometimes be an awful surprise - know in
advance and match the fees to your likely use of the bank. Most banks will start charging the more you use the bank - ATM fees, check fees, teller fees etc.
* Does the bank offer a youth or student package that is relevant to you? Often such packages come with better fee deals and sometimes good interest.
* What are the interest rates?
* Is there a possibility of a combined account structure? For example, one such structure could be some savings, some spending but both contributing to interest building.

4. Make comparisons. You have done the homework. Now do the comparing and ask such things as:
* Which bank has the best fees for what you are seeking?
* Which bank has the package that you are seeking?
* Which bank has special deals for young people? Compare them.

5. Think about location. Location is very important. Some banks are very localized and it may be difficult to find branches or shared branch locations elsewhere in your country or even overseas. This is where you might think of having online Savings Account If you are about to graduate from high-school, you may be studying somewhere else than your local region, so keep this in mind when choosing a bank.

Online Savings benefits & features:
# Free Online Banking (required)
# Free Electronic statements (required)
# If you maintain a minimum balance of $ each day of the monthly statement cycle you can even avoid the monthly service charge amount of $

6. Find a credit union. Credit unions are financial institutions that compete with banks, except that they are non profit. Credit unions don't have stockholders to pay, and therefore often give better interest rates with lower fees.

8. Ask your parents. Have a parent help you look at and compare different banks, as well as helping you to select the most suitable one. As a teenager, unless you are 18, you may not be able to open an account without a parent's name or permission, depending on your country's rules. Whatever the rules, it is always a wise solution to seek your parent's cooperation - many a parent will be more than happy to help add savings to your account when you demonstrate the initiative and self-responsibility to open a bank account.