We’ve all heard about the friendly neighborhood credit unions from time to time. It just gets to us, the way those credit unions tout out their advertisement panels, their benefits and the minimal risk factors, as opposed to any other regular or commercial bank out there.

From a general perspective, yes, credit unions are safer to deal with. But there’s always a risk probability when you’re knee deep in such organizations. The fact is that wherever money is involved, there’re risks and unforeseen consequences to certain actions. Now, I’ve been friends with a guy, who used to work at a local credit union in his city.

It was 2008, and during one of our chitter chatters; he kind of opened up about a lot of things that people don’t know about credit unions. These are the things that sometimes become the sole cause of you ending up losing money, rather than saving it up in form of profits or anything that’s financially helpful to you.

Our discussion led us to believe that most of the times, it’s the lack of information that incurs financial injury. People just come to credit unions with a notion that credit unions are much better than commercial banks, which is very true. But other than that, they don’t care to go beyond the offers and fine prints at all.

The thing is that your friendly neighborhood credit union might not be as bad as it looks, if only you’d have taken care of the following things. Remember, it’s not too late to go back and straighten out the kinks:

• It really helps a lot to remember you credit union account number. Sometimes when you’re talking to a sales representative or a person who’s in the department that appeals to your interest, the account number is one main thing, which will eventually spring up sooner or later. It saves a lot of time on both ends if you know the account number.

• Always know something about your credit union account. Same goes for the credit score and different terms and conditions that appeal to your neighborhood credit union. In any case, it is not a credit union’s job to call up each and every client regarding their latest ongoing offers, or the recent changes that were made in the fee module. You have to be responsible for your actions, by getting in contact with the organization and staying on top of any piece of information available.

• Lying to a credit union or a commercial banking official is not a good thing. Seriously, they can always tell whenever you’re lying or being straight up front about certain dos and don’ts.

• Since 2008, credit unions and all regular banks are required to charge you overdraft fee. There’re other fee modules as well, which are totally unavoidable.  The thing that makes your credit union worth doing business with is the degree of variation in their fee structure. Though you can’t ask them for refunds, it is your job to know if your neighborhood credit union is charging higher than the one your colleagues signed up with.

• Every personal financial institution has a set of guidelines. At the time of signing up with your local credit union, look for those guidelines, besides greedily looking at those flashy brochures and pamphlets. Why is it important? Whenever you run into trouble, you’ll be angry most of the time, and frustrated because of the fact that the credit union representative is not, or unable, to help you.

• The best way to deal with this dilemma is to have a civil conversation that’s void of threats, aloof of ‘Okay, I’ll take my money elsewhere’ and certainly free of ‘this wasn’t supposed to happen to me.’ Mistakes happen at times, and the best way to rectify them is through a proper channel.

The Hidden Cost Factor:

Most of the time when people prefer dealing with credit unions, over commercial banks, is because of the low fee and interest rates. Your State or city will have multiple credit union centers and banks that have different enticing offers and different fees.

The best approach is to visit, or call each one of the financial institutes, and get to know their percentage against yearly mortgage, car loans, health insurance percentage, car insurance and stuff like that. Now after you’ve got the data, do the math and calculate the amount of money you’ll be saving against each category.

Finally, go for the credit union that has the best rates and huge opportunities for saving money.

Recently, due to an overwhelming number of complaints against commercial and online banks, people thought that it’d be better to finally switch their dealings to some other platform. We’re talking about credit unions and the so called “benefits” associated with them.

Now those of you who never had the pleasure of dabbling in either one of the above mentioned platforms, they think that credit unions and commercial banks are the same thing. In fact, the reality is quite different as some well-groomed financial experts suggest that credit unions and commercial banks have a huge difference – just like the concept of day and night.

The bottom line is that every person who has an account somewhere in a bank or a credit union needs that money to be safe for an indefinite amount of time. The part where you select a credit union comes to your own personal interests and environmental constraints.

An in depth analysis of credit unions suggests that they were, and still are, designed to serve a very particular group of individuals. People who’re entitled to use credit union accounts are the guys who’re members of these unions – outsiders simply don’t get the same privileges. The plus point of credit unions is that these unions are nonprofit organizations, so whatever the amount of profit is incurred, it goes in your pocket in the end.

According to CBS News experts, dumping a commercial bank may not be a sound decision for you. The steps could utterly fail because credit unions don’t come with a lot of guarantees. So do the commercial banks, but at least, these banks have some rules and regulations, alongside paper based agreements that you can haul to a court, in case something goes wrong.

Another big benefit of dealing with credit union accounts is that most of the American States exempt them from taxes and interests. It’s the “not for profit” tag that usually does the trick for these organization. However, credit unions are mostly meant for small time stock holders who don’t want to take a lot of risks.

The main reason as to why commercial banks aren’t prioritized is because of the following common factors:

• The fee structure is really pinching.

• Hidden charges that spring the bejeesus out of everyone

• Poor customer service

• Lack of knowledge and information circulation

The Future and Present Situation of Credit Unions:

At the moment, credit unions are doing a pretty damn good job. First of all, there’s a lot of room for expansion and security for those individuals who want to play at a small level. Secondly, banks are unpredictable when it comes to lending and interest rates. On the other hand, credit unions are lending because they’re not tangled up in a sub-prime mess.

Now if we compare the interest rates of credit unions with commercial banks, we get the following results.

*These results are just to give you a general overview. The exact percentage and figures might be different as per your State.

-          Car Loans:

• Commercial Banks: 6:34%

• Credit Unions: 5:15%

• The Difference Adds up to $170 Approx.

-          Mortgage Rate For 1 Year:

• Commercial Banks: 4.73%

• Credit Unions: 4.32%

• The Difference is an extra $440

For rest of the percentages, you can consult different credit unions and banks in your local vicinity. You can even compare online banks with credit unions that reside in your community, just to take a whiff of the difference between two platforms in terms of financial standings.

What’s The Bottom Line Here?

Commercial banks and credit unions have their separate benefits. For example, if you have accounts in a commercial bank, it means that most of the time you’re eligible for profits that go straight into your pocket – granted that you were the investor, and the account was a savings account.

In the same context, the profit is converted back into a better interest rate percentage, when dealing with credit unions. It means that the next time you’ll be making car loan, mortgage or life insurance payments, the interest rate on them, will be quite lower than the previous payment cycle.

By the way, regardless of credit unions and commercial banking platform, there’re some fees that are simply unavoidable. Take the example of overdraft fee, as it has been going on since 2008. Both credit unions and commercial banks have collected over $20 Billion as an overdraft fee, which is mandatory in all kinds of cases.

It is a shame that despite of so much advancement and information abundance, people still get duped by below average banks and their “friendly” schemes that just suck the life out of one’s hard earned cash. This article will shed some light on banking and several aspects related to Federal Deposit Insurance Corporation. Let’s get to it, shall we?

What is FDIC – A Quick Intro?

Long ago, in 1933, during the great economic depression, some bright headed individuals from the economic circles, gathered around to lay the foundations of a platform. This so called platform serves the main purpose of insuring your savings, checking and current accounts so that you don’t end up losing money whenever the bank collides into an imminent functionality failure.

The definition isn’t all that’s related to FDIC insured national banks; there’s more to it. There’re people who open up accounts at FDIC insured banks but during the time of bank failure, their account assets are not recovered at all. What does this mean? Is the FDIC another scam? Did the bank do something to make itself look like as if it was insured by FDIC, hence trying to pretend that it was legit?

The explanations of such questions don’t relate to one factor, or a specific collection of factors. In times when the said FDIC insured national bank fails to come up with assets, or fails to keep its promises, there comes a lot of different things under the limelight. The customer’s point of view is always limited to certain things, but the bank on the other hand, will always have a slight leverage.

What Does FDIC Do?

Regardless of the fact whether your bank was fake or legit, FDIC’s job is to control panicky situations. In a nutshell, FDIC’s job is to stabilize the economy, instead of posing a friendly partnership towards depositors like you. You, as a client, are not FDIC’s priority; it’s the country and the bank that the FDIC favors in almost all sorts of situations.

During the great depression, people started withdrawing their money from banks, thinking that their cash will be safe inside the confines of their homes. This withdrawal initiated a domino effect, which further caused other banks to go out of business.

Due to an absence of financial circulation, the country’s economy started to suffer. FDIC was primarily founded to assure people that it’s safe for them to deposit their money in FDIC national bank accounts. Hence, it all makes sense when we look at things from a bigger perspective – the country gets saved one bank at a time, and you’re held under the impression that your cash is in safe hands.

What’s The Solution Then?

Keep reading this article series and you’ll get to know what works best and what doesn’t.

There’s no such thing as Free online banking accounts. Same thing goes for traditional bank accounts. If in any case, there had been an absolutely free account, then billions of people would’ve opened their accounts at that ideal bank. So you get the big picture here, don’t you?

Now when we talk about “free” online or traditional bank accounts, we’re referring to the minimal fee thing. In one of our articles, we went through a list of top online banks and what they have to offer in terms of fee and packages.

The free thing comes into action when the bank is letting you open an account for as low as $1, and then you’re only charged a small amount of money for things, such as; maintenance, late fee, over limit purchases and etc.

Here’s the most important question: should I go for a free online bank account, or should I just stick with the conventional means. The thing is that you should go for either one of the two options if you can define what normal life is. If you can get to save your hard earned money, after paying all kinds of fee, then any of the two choices is suitable.

The next big thing is choosing the type of bank account from a bigger perspective. For instance, some banks charge $4 or $6 as maintenance fee, and another $5 for customer service fee. We add up these numbers and calculate them on yearly basis, which is exactly the amount of money that you end up paying as an EXTRA freebie deal.

On top of that, we let them get away with it. This same amount of fee money could’ve been saved as your son’s, or your own tuition fee. You could’ve renovated some part of your house, or you could’ve simply celebrated an important moment in your life. It is strongly advised that you monitor your online bank accounts every other day.

The biggest advantage that online banks have, over traditional banks, is that they don’t charge a ridiculous amount of money every now and then. Plus there’s that big choice factor, where you can take your money to a new bank, if the existing online bank isn’t working for you. Take a look at type of free online bank accounts below:

• Credit or Checking Account:
  • This account is opened against a debit card. The checking or current account works as per a primary rule that suggests that you get to withdraw money whenever you want. And for every withdrawal, they either charge some fee, reimburse some fee, or make it mandatory that you do 10 – 12 withdrawals every month.

• Basic Bank Account:
  • These accounts are a rare commodity, which should be passed up on. Traditional banks let you open basic accounts that are in compliance with Commonwealth Seniors Health policies. However, very few online banks offer these accounts and issue a separate card that lets people withdraw their cash.
    • No minimum balance for opening an account.
    • There’s no monthly maintenance fee.
    • 6 free transactions are allotted every month. But they might be limited to selected banks and their respective branches.

• Personal Transaction Account:
  • Also known as a PTA, this account has features that may or may not be limited to:
    • ATM withdrawals.
    • Ecommerce support for paying bills and managing money.
    • Support for depositing money into your account through a multitude of options.
    • Ability to link accounts, in order to easily allow all the cash to be transferred into one main account.

Speaking of linking accounts, Payoneer allows this option. However, it only works for those people who have online businesses, or who’re into freelancing and stuff. Some banks have lucrative offers which are really important to be aware of. Take it as a warning or something but certain banks claim that they credit your account with $50 or $100 if you use their debit card POS transactions.

However, they fail to mention that the POS transaction need to be made several times, before you can get that extra cash.

• The Online Savings Account:
  • People call it the Internet Only or online savings account, which comes with high interest rate and very low fee. The up side is that you can get back a lot of money if you’ve been saving your cash in this account. The downside is that you can’t withdraw this cash because it’s a SAVINGS account.
  • Go for an online account that is in connection with your savings account at the same bank. This deal will really work out a lot of things for you because the movement of funds from one end to another tends to be fast.

Anyhow, to start off, let’s see what a checking account is. Later, we’ll see what kind of services does an online checking account is capable of providing.

Checking Account – Basic Explanation:

Checking accounts are accounts that are loaded with the facility of withdrawing cash whenever it is needed. So if you’re the kind of person who needs to withdraw money on regular or frequent basis, the checking account can help you with this kind of deal. Likewise, you can also make deposits in the checking account, with a slight variation in benefits from bank to bank.

Now when we talk about online checking accounts, there banks and accredited institutes that provide the same facilities with a twist. Let’s take Payoneer as an example here. Payoneer provides a checking account that can help you to withdraw money. As an online bank, the checking account offer is candy wrapped in a very enticing manner.

For instance, you’re offered a Free Debit Card as a new customer at Payoneer platform. However, the as per the regulations of the main bank that heads Payoneer, a “small” first time cash load fee of $24 is deducted without the user’s consent. On top of that, there’s a maintenance fee of $1 to $3, which is deducted on monthly basis.

The purpose of stating Payoneer checking account as an example was to illustrate how banks deduct fee, despite of trying to make their offers unique and intriguing to first timers. Regardless of what kind of online bank you’re willing to deal with, there’re some rules and precautionary measures that need to be adhered to:

Fee Structure and Hidden Charges:

Is the online checking account absolutely free of cost? Does the online bank deduct fee on each withdrawal or, does it deduct fee on bi weekly or monthly terms? These are the things that need to be taken care of BEFORE signing up for a checking account at any online bank.

Did You Assess The APY Factor?

The APY, or the Annual Percentage Yield, points to a specific percentage of interest that’s accrued as form of a fee or total profit on annual basis. So in case of a profit, you should open an online checking account that has a higher APY percentage – it just makes sense.

Are They FDIC Insured?

FDIC insurance matters a lot whenever you’re opening an account. Despite of the cash incentives that some online and land based banks offer, FDIC insurance is a non-negligible factor. In case the bank goes out of business, FDIC regulations are always there to help you recover your money.

In the end, it sounds like a solid advice to consult other financial experts and existing clients before considering opening a checking account with the bank of your choice. Trust us; it’ll save you a lot of hassle in the near future.

Joe Lopez is an active Miami business owner, who dabbled in online banking last year. According to MSNBC news snippets, Lopez will never forget the day when he logged on to his personal online banking account only to find out that someone had “stolen” $90,000 from it.

In a nutshell, Lopez discovered after a while that someone had used his personal computer to plant a spyware/key logging software. The antivirus on this PC wasn’t able to sniff that suspicious program, which is why; the hacker went ahead with stealing all the necessary information.

Federal investigators say that the funds were transferred to some offshore banking account. Fortunately, after a few months struggle, Joe Lopez was able to recover his cash, but it wasn’t the lump sum amount as some of the portion had to be paid as legal expenses. We all know that legal expenses cost a lot, so Joe probably recovered 50% of his savings and a VALUABLE lesson about online banks.

He thought that it was safe and convenient to completely trust online banks, but he was wrong. Now when we proceed with the top online banks list, and details, in this article, we are in no way pushing you to open an account at any of the appended banks. Above all, the thing which really matters is your cash security, and if none of the online banks in 2011 are able to deliver it, it’s better for you to stick with the usual banking practices.

Top Online Banks – Which One’s Suitable For Me?

The biggest benefit of banking online through online banks can be summed up in one word: “Convenience”. Now that we no longer have to go through the hassle of paying monthly charges for our regular bank accounts, a requirement to meet a certain criterion, and so called service charges; online banking sounds so cool. Doesn’t it?

Credit unions and small scale banks use a lot of ways to entice customers. Online banking protocols are included in those intriguing offers, and they’re really not that hard to get into. On top of that it becomes easier to insert you debit card into any ATM because they’re all universally accepted. For instance, Payoneer offers MasterCard service that can help its owners to withdraw cash from anywhere in the world. It’s just that the ATM has to comply with MasterCard online banking standards.

Following is the list of different banks that we categorized in terms of:

• Free Online Banking Options.
• Payment of Bills
• Low Fee, No Hidden Charges
• Overall Low Rate Fee Environment
• Interest Yield Rate

1. Evantage Bank – Oklahoma:

1. Most of the Oklahomans who’re into online banks, have already set up their accounts at Evantage Bank. This bank offers a 3.75% reward rate on annual basis, granted that your savings are over $10,000. The bank charges no monthly fee and all you have to do is pay them a dollar for signing up for an account.
   1.                                                                i.      Some time back it was mandatory for Evantage bank clients to use their online ATM card, 10 times a month for cash withdrawals or account statement withdrawals. It isn’t too much to ask for.
   2.                                                              ii.      Evantage Bank is categorized in the High Yield category by us. You can Google the bank name and visit the official website for further and up to date information.

1. Westfield Bank – Ohio:

1. If you’re living in Akron, Ohio, the Westfield Bank may sound like an appropriate choice to you, for online banking. This online bank, unlike Evantage, doesn’t require a sum of $10,000 to start off with the yield process. Westfield Bank offers a straight $3.5% yield rate on a minimal $100 deposit.
   1.                                                                i.      You have to use your Westfield Bank ATM debit card for as much as 12 times a month.
   2.                                                              ii.      You have to make one automatic payment or an automatic deposit every month.
   3.                                                             iii.      You have to get your monthly statement through electronic means.
   4.                                                            iv.      This bank doesn’t charge any ATM maintenance fee or hidden charges. In fact, you get $12 deposited bank in your account as part of their ATM courtesy services.
   5.                                                              v.      We categorized Westfield Bank is the High Yield category.

1. Look Ma’ No Fee! – Ally Bank:

1. If Westfield Bank seemed like a tough nut to crack, perhaps Ally Bank could help you in straightening out those kinks in your account. By the way, we added the “Look Ma’ No Fee” statement on our own; we thought that it made more sense because the bank doesn’t charge a lot as compared to other platforms.
   1.                                                                i.      Ally Bank encourages you to open a checking account for as little as $1.
   2.                                                              ii.      You don’t have to have a minimum or maximum balance requirement to use their perks.
   3.                                                             iii.      The ATM worldwide fee is automatically rebated to your account by this bank.
   4.                                                            iv.      The current yield level is 1.04%, which, in our opinion, couldn’t go any lower.

1. ING Direct:

1. In terms of incentives and minimum fee level, ING Direct is yet another bank of its own kind. As a new customer, the bank pays you $50 for using your debit card three times. Now considering the fact that you purchased low priced items through your ING Direct debit card, $50 doesn’t sound like a bad deposit.
   1.                                                                i.      ING Direct doesn’t accommodate international ATM withdrawals. You can only withdraw cash from 35,000 ATM points that are accredited by ING Direct Bank.
   2.                                                              ii.      The overdraft fee is a lot lower than other competitor banks.

Interested in knowing more about online banks? Try surfing the internet for that very purpose. In any case, know that it will do you good to go through your homework and make sure that the ‘top online bank’ you’re about to deal with, is really secure and trustable.