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Modern technology has provided you with a variety of ways to do business with your bank. ATMs and Electronic Banking are changing the way we use our money -- but it's still the old reliable monthly statement that helps us keep track of where it's all gone.
ATMs: automatic teller machines
Automatic teller machines let you withdraw, deposit or transfer money from your checking and savings accounts using a coded plastic card.
You can complete many separate banking transactions using an ATM card. Usually the only limit is the amount of cash you can withdraw on any one day. Different banks have different limits, ranging from $200 to $500.
When you've finished a transaction, the machine prints a record of what you've done. You should check each one against your monthly bank statement and follow up immediately with your bank if you uncover any errors.
how ATMs work All you need to use an ATM are a coded card and a PIN.
The ATM card has your name and a 16-digit account number embossed on the front and a magnetic tape, or strip, on the back that identifies your bank and account number.
When you insert your card, the screen asks for your PIN, or personal identification number. If you enter the correct one, you can access whichever accounts are tied to your card.
WARNING: Don't write your PIN number on your card. Anyone who has it can use your account.
atm networks You can use the machine at your own bank--and at thousands of others.
Most banks belong to a regional ATM system that gives their customers access to local and regional banks. Regional systems are linked, in turn, to national and international networks like Cirrus and Plus.
You can get cash anywhere the system exists: dollars in Utah, francs in Paris, or pounds in London, whether you bank in Atlanta or Timbuktu.
what if there's a mistake? You may question the ATM transactions reported in your monthly bank statement.
If you think there are errors, check the statement against your records. The most common ATM problems come from customers who forget about transactions, and from bank workers who record wrong amounts.
When you spot a problem on your statement, contact your bank quickly. The bank must respond within 10 days and resolve the problem within 45 days. If you still have a complaint, they must give you a copy of their report to review.
swallowed cards There are times when the machine keeps your card.
Often, when a machine keeps your card, there's no way to get it back right away. You should notify your own bank. They'll return it or replace it for you.
Sometimes it's just a mistake, but when someone enters an incorrect PIN three times, most machines keep the card, because they assume an unauthorized person is using it.
lost or stolen cards You should keep close tabs on your ATM card to protect your accounts.
If you discover your ATM card is lost or stolen, report it immediately. The bank can cancel access to your accounts.
You have two business days to report an unauthorized withdrawal listed on your monthly bank statement to limit your potential liability to the first $50 withdrawn. Waiting 3 to 60 days to report the problem can extend your liability to $500. Waiting over 60 days can cost you everything in your account.
fees for each use ATMs are easy, but they're not always cheap.
Many banks charge you a fee for ATM transactions, especially if you are using your card at another bank's machine. Fees can range from $0.75 to $2.00, whatever the type or amount of the transaction.
If you use ATMs frequently, take a bank's fee policy into account when you're shopping for a checking or savings account.
WARNING: If you are paying a fee, make one larger withdrawal a week instead of several small ones.
atm cards as debit cards You can sometimes use an ATM card in place of a check or credit card.
If you use your ATM card in a store or at a gas pump, the amount is automatically transferred from your account to the seller's. Stores like debit cards, because they get their money immediately.
You may be more reluctant: some banks charge a fee for using your card this way -- and you lose the float -- the time between your purchase and when a check clears or your credit card bill is due.
Most of the innovations in modern banking are the result of ever-more sophisticated electronic technology.
Some things we take for granted would not be possible without technology, including daily compounding of interest, ATMs, and prompt crediting of out-of-state checks.
But tradition keeps us doing some things that may not be necessary -- or practical -- like using signatures to authorize check.
direct deposits Direct deposits save you time and give you faster access to your money.
Increasingly you can choose to have your paycheck deposited directly in your account, or even split between two accounts--like a checking account and an investment fund. The money is credited electronically on the payment date and is available either immediately or the next day. Usually, you get a statement from your employer when the deposit is made.
Problems are rare but they happen, most frequently when you change banks or your bank is sold. If a deposit doesn't show up in your account, you should check to be sure your employer has the correct information. Otherwise, it will happen again.
automatic withdrawals Electronic banking can simplify bill-paying.
You can authorize automatic payments from your account for regular bills, including insurance, college tuition, and car loans. Usually all that's required is your signing a consent form and sending a voided check or deposit slip from your account.
However, you need to keep careful track of the withdrawal schedule and the total amount you're committed to, so you have enough money available in your account.
home banking Some banks let you bank electronically, using your personal computer or a special telephone connection.
With a home banking connection, you can pay bills, transfer funds, check your account balances, and sometimes even buy and sell stocks without writing and mailing checks. And you can program your fixed payments--like student loans or deposits into investment accounts-- so they're done automatically.
There may be some drawbacks:
- Home banking is still relatively expensive ($5-15 per month, plus other account fees as well as a computer, the software, and the phone hook-up).
- You can't authorize payments to companies that aren't on the bank's list.
- Banks can wait 5 days to pay authorized bills, while debiting your account the day you give the order.
money from machines The electronic age has simplified access to foreign currency.
In most places around the world you can use an ATM card or a travel and leisure card like American Express and Diners Club to withdraw money from an automatic teller in the currency you need straight out of your bank account. There's a fee, generally $1-$2 for each transaction, but the exchange rate is usually about the best you'll get.
All you need is the card and a Personal Identification Number (PIN).
Balancing your checkbook means being sure your records and the bank's agree on how much money you have in your account.
Each month the bank sends you a statement, reporting all the deposits and withdrawals--cash, checks, and ATM activity-- since the last statement. The statement also tells you how much is in the account on the day the statement was prepared. To balance the account, you compare those numbers with the record in your checkbook.
what else the statement tells you Together, your bank statement and your checkbook are probably the most complete record you have of your finances.
Balancing your checkbook each month helps you keep tabs on what you're spending anywhere you're spending it--as well as how much the account is costing you in fees and other charges.
Some banks have developed relationship statements which cover all the accounts you have with the bank -- checking, savings, CDs, and even loans. The advantage is convenience: you have a monthly "snapshot" of your dealings with the bank all on one document.
It may also provide helpful information, such as when your CD will mature or new services the bank offers.
how long should you keep bank records? Just getting a checkbook to balance isn't the end of the story.
You should keep bank statements at least long enough to be sure that all the checks you write clear your account. Many people keep statements at least a year, and others keep them until the file cabinet overflows--or they move away.
Since canceled checks are proof that payment was made, they're important records especially for dealings with college bursar's offices, insurance companies, lenders, tax collectors and other places that usually do not send receipts. (Credit card statements, as well as phone and utility bills, show when the payment was credited to your account.)
You should keep checks you write to pay your taxes and for items that are part of your tax records at least three years--the amount of time the IRS has to audit you.
what if there's an error? It's important to check your records promptly so you can get errors corrected.
In most cases, bank statements are right. But you should compare your records -- such as ATM receipts and deposit slips -- since errors do occur. Generally, you have 60 days to report errors involving electronic transfers, but only 14 days for other kinds of mistakes. The sooner you notify the bank, the better.
A minimum balance is the least amount of money a bank requires you to keep on deposit to qualify to earn interest or receive certain benefits like reduced fees or free checking.
At some banks, you qualify if your average balance for the entire period is above the minimum level. At others, you lose benefits if your balance drops below the minimum at any time during the month.
Some banks define the minimum as the combined amount in all your accounts (checking, savings, money market, even CDs). Others don't.
Taking advantage of minimum balance options can save you money. But you'll want to compare what you save with what you could earn by investing your money elsewhere.
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