From the Virginia Society of Certified Public Accountants - Presented by Dean Knepper, CPA, CFP®


JJanuary 3, 2006) — Despite the various sophisticated personal cash management options available, most people continue to use a bank for their basic financial needs. Whether you choose to do most of your banking at your local branch or prefer to bank online, it’s important to know the basics so you can make the most out of the services available to you. Here are some tips for banking smart, brought to you by the Virginia Society of CPAs (VSCPA):

Choose the right checking account.

Most banks offer several types of checking accounts. To pick the right one for you, you need to know your checking account habits. How many checks do you write each month? Are you willing to keep a minimum balance to avoid monthly maintenance fees? Do you want to earn interest on the money in your checking account? Are you comfortable doing most of your transactions online, by phone or at an ATM? Your answers to these and similar questions will help you pick the right account for your banking style.

Analyze banking fees.

Ask your bank for a list of its fees and be sure you understand how charges are applied. For example, many banks impose a fee when your account balance falls below a specific dollar amount, but you need to know how that dollar amount is determined. Is it based on your average balance during the month (the better option) or do you get charged if your balance drops below the minimum on just one day?

Lower the cost of using ATMs.

ATMs provide convenient access to your money, but that convenience may come at a cost. In most cases, when you use an ATM that isn’t owned by your bank, you’ll be charged a fee by both your bank and the bank that owns the ATM. To avoid excessive ATM fees, choose a bank with a large ATM presence where you live and work.

When you’re outside the area served by your bank’s ATM network, consider withdrawing larger sums each time, so you’ll make fewer trips to the ATM and save on transaction fees. If your ATM card is also a debit card, request “cash back” when making purchases at supermarkets and other retailers. Most merchants don’t charge for these transactions.

Buy checks through a discounter.

Buy checks from a direct mail check printer. Some banks charge up to $20 for a supply of checks you can get for much less from an outside printer.

Know Check 21.

Check 21 is a federal law that modernizes the way banks process paper checks. Under Check 21, checks you write may clear much faster than they used to, in some cases, in hours rather than days. Now it’s more important than ever that you have the money in your account when you write a check.

Don’t overdraw your account.

Some banks charge as much as $30 for an overdraft. Be sure to record all the checks you write and withdrawals you make. If you have a debit card, keep your receipts in one place, and update your checkbook every few days.

Leverage your banking relationship.

Banks offer free or discounted services and other advantages to customers who consolidate their accounts at one bank. Your savings account, for example, may offset balance requirements on your checking account.

Consider online banking.

Banking online is a good way to stay on top of your finances. Most banks allow you to view your online accounts for free. Typically, you can check your balance, see when your checks clear and view your recent transactions. However, you may have to pay a fee for online bill payment.

Use savings accounts only for short-term goals.

A savings account is a good place to keep short-term savings and build an emergency fund. You can access your money quickly and with no loss of interest or principal. However, with interest rates so low, there are better ways to invest money you won’t need soon.

Consult with a CPA [and CERTIFIED FINANCIAL PLANNER™ professional].

Banking is just one component of a comprehensive financial plan. Consult with a CPA [and CERTIFIED FINANCIAL PLANNER™ professional] to learn more about how you can more effectively manage your finances.


The Virginia Society of CPAs is the leading professional association dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. Founded in 1909, the Society has nearly 8,000 members who work in public accounting, industry, government and education. This Money Management column and other financial news articles can be found in the Press Room on the VSCPA Web site at


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