HANDLING YOUR CASH WITH BANKS:

1. Put your money in a bank account (safe).

Your bank-account is one of the safest places to stash your cash since your account is insured against loss by the federal government for up to $100,000 per depositor.

2. Pay for the convenience of a bank account.

A Bank pays lower rates on interest bearing accounts than brokerages and mutual fund companies that offer check-writing privileges. What is more, bank fees can be high and account costs can easily add up to $200 a year or more unless you keep the minimum required balance on deposit.

3. Inflation can eat what you earn from a bank.

Even at a low rate of inflation, the annual creep in the cost of goods and services usually outpaces what banks pay in interest-bearing accounts.

4. Interest rates are not created equal.

Banks often use different methods to calculate interest. To compare how much money you will earn from various accounts in a year, ask for each account’s ( annual percentage yield ). Banks typically quote both figures, but only APYs are calculated the same way everywhere.

5. You can always get better rates (but there is a catch)

Certificates of deposit “CDs”, offer some of the best and guaranteed rates on your money and they are insured up to $100,000 each. The catch - you have to lock up your money for three months to five years or more. If interest rates fall before the CD expires, the bank is out of luck and must give you the rate it quoted. If the rates climb, you are stuck with the lower rate.

6. Automated teller machine fees can take a significant bite out of your budget.

The convenience of using automated teller machines is an increasingly pricey one. On average, the fee your bank charges you to use another company’s ATM is around $1.50. That is on top of the average $1.50 that the other institution charges you to use its ATM.

7. It takes work to get the best deal.

You will not get a great deal on a car if you just walk into a dealer and drop your money down. Likewise, you will not get a great banking deal unless you comparison-shop and ask about price breaks. For example, a bank might offer free checking if you are a shareholder or if you direct deposit your paycheck.

8. Try to use the internet to shop for bank services.

The Internet can be used to compare fees, yields, and minimum deposit requirements nationwide. To find out what a local bank is offering, insert their company name into any internet search engine or compare what different banks offer at the cnn website, in their Money’s Banking section.

9. Online banking can make bill paying easier.

Honestly, electronic bill paying can save you the monthly hassle of paying your bills. And if you mix online banking with a personal-finance management program, such as Quicken or Microsoft Money, you will be able to link your banking with your budgeting and financial planning as well. Do not overlook this great service.

10. You can bank without a bank.

A lot of financial institutions offer accounts that resemble bank services. The most common ones are, Credit union accounts; mutual fund money market funds; and brokerage cash-management accounts.