With the news these days about some banks charging extra fees, many people are thinking about moving their accounts.
It's not easy to compare financial institutions, and you usually have to dig for the data you need about checking fees.
But overall, it appears military customers are paying less in fees at credit unions than at banks.
A Military Times analysis of the 218 credit unions and 32 banks with operating agreements on installations shows the average amount in fees collected by these credit unions in 2010 was $45 per deposit account, compared with an average of $82 for on-base banks.
Features vary from one financial institution to another, and in fairness, many banks have favorable terms and services. But some reasons to consider credit unions include:
• The nature of credit unions' operations allows them to keep fees low. They are financial cooperatives and not in business to make a profit. They're exempt from federal and state income taxes, although they do pay payroll, sales and property taxes. Like on-base banks, credit unions are required to provide financial education on bases where they operate.
• You might find higher interest rates on savings.
• You might find lower interest rates on loans; an interest-rate cap of 18 percent applies to loans made by federal credit unions through at least Sept. 10, 2012. The cap applies to all federal credit union lending except for short-term, small-dollar loan programs. (Credit unions can make small loans, as alternatives to payday loans, at annual percentage rates up to 28 percent.)
Many credit unions offer loans at less than 18 percent interest, depending on your credit rating.
• Some offer interest-earning checking accounts, though rates are low. This doesn't necessarily mean you won't have to pay monthly maintenance fees, so read the fine print. Many banks and credit unions on military bases offer free checking as long as you use direct deposit.
Joining a credit union may take a little more work. Each one's charter specifies who is eligible to join, based on a common bond of employment, association or residence; eligibility details are available on their websites.
Eligible people submit a membership application and purchase a share to join — usually $5 to $10.
Deposits in federal credit unions are insured up to $250,000 by the National Credit Union Share Insurance Fund, backed by the government.
As you explore the best financial institution for you, read the fine print carefully on any product — look for policies on ATM charges, debit and credit card charges and monthly maintenance fees on checking accounts. Is there a fee for transferring your money from one account to another, such as from savings to checking? Check for overdraft fees and policies on charging multiple times in a day.
In this ever-changing fee environment, it's imperative that you open and read any mail from your financial institution. That includes checking your monthly statements for any changes and new charges.
Keep careful tabs on your statements to see what fees you are paying, and decide whether you need to make a change.
Remember: You have options to make responsible choices in your banking habits.