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The Sandy Spring Way

Establishing Your First Relationship with a Financial Institution

April 2nd, 2013 | By Beau Mercer

Establishing Your First Relationship with a Financial Institution

 Financial Literacy Month

A great working relationship with a financial institution, such as a bank, is an important part of securing your financial future. There are many considerations when choosing your financial partner. Below is a list of what to think about when making this significant decision:

  • Location of branches and ATMs – You want an organization that is relatively convenient to get to from where you live. While you may not visit the branch often, it is nice to know that you can physically go to the branch and talk to someone whenever necessary. You also want to make sure that there are ATMs conveniently located so you do not pay fees for other institutions’ ATMs. Many institutions are part of networks that do not charge fees, but be sure to find out.
  • Fairly priced products and services – Not all institutions are the same, so compare the interest rates offered on different types of accounts. Get information on all of the fees that may be imposed for low balances or excessive transactions.
  • A pleasant way of doing business – Your financial organization should be your partner on the road to financial security. Find an institution that wants your business. If you do not have a feeling of comfort when you walk into a branch or talk to someone on the phone, seek out another organization. Remember: You are the buyer and they are the seller of financial services.

When you walk into a branch, be prepared by knowing what you need and having the information that you will need: Social Security number, identification and proof of residence. Once you arrive at the branch, talk with a personal banker about your needs. Financial organizations offer a variety of accounts and other services, including many of the following:

  • Checking Account – This will probably be the main account that you use for your finances. Your paycheck will be deposited into it, you will use it to pay your bills, and you will withdraw money from it with an ATM card. You may have to choose from accounts that have different minimum balances, different limits on the number of monthly transactions and varying interest rates. Choose one that suits your needs and has no or very minimal fees. If you do not plan to leave large balances in the account, an account with no fees is probably better than one that pays a slightly higher interest rate. Even an account that pays no interest is better than one that has a $5 monthly fee. Be sure to ask about all of these features.
  • Savings Account – Even if you do not anticipate having much to save, open a savings account. It will pay more interest than your checking account and putting even small amounts into it will help you accumulate funds when you need them.
  • Money Market Account – Similar to a high-yield savings account, money market accounts offer the benefits of higher returns along with limited access to funds through checks, withdrawals and transfers. Money market accounts usually offer a tiered interest rate structure so higher balances can earn higher rates. There is no monthly service fee, however, a minimum balance is typically required to earn interest which compounds daily and is paid monthly. Money market accounts are generally FDIC insured up to the legal limits. Federal regulations limit the number of transfers to six per month.
  • Certificates of Deposit (CDs) – For larger savings deposits earmarked for a longer term time horizon, FDIC-insured CDs offer the highest possible fixed rates for a low-risk savings option. There is usually a minimum deposit with terms ranging from 90 days to five years. A substantial bank penalty may be incurred for early withdrawal. Upon maturity, the balance can be automatically rolled into another CD or transferred into another business account.
  • ATM Card – Having an ATM card and access to convenient ATM machines will enable you to withdraw money when you need it and avoid carrying large amounts of cash when you do not need it. Be sure your ATM card is linked to both your checking and savings accounts. That way, you can transfer funds between the accounts as necessary.
  • Direct Deposit – Have your paycheck deposited electronically into your checking account; this will save you time and will put your money to work faster. Your institution will provide the information you need so you can provide your employer with the information the company needs.
  • Safe Deposit Box – You may not need a safe deposit box, but if you have any valuables that you do not want to store at home, a safe deposit box is nice to have. They are usually inexpensive and you can access them at the branch as you please. Items like expensive jewelry and important documents can go into the safe deposit box to stay protected in the event of a burglary or fire.
  • Online Banking – By singing up for online banking services, you can get your banking done faster and easier than going to a branch. Online banking usually offers bill pay and tracking expenses 24/7. If you have access to the Internet, you have access to your account. Online banking is a convenient option for budgeting and tracking expenses.
  • Mobile Banking – If you have a smartphone, you can access your bank accounts through a mobile web browser or via an application. Mobile banking usually offers the ability to view account balances and recent account activity, pay bills, transfer funds, and locate the nearest branch or ATM.

Simplify your financial life by having these basic services with one institution. In addition, an existing relationship with your financial partner may come in handy when you apply for a loan, such as an auto loan or a mortgage.


Celebrate National Financial Literacy Month with Sandy Spring Bank!

  • Retweet our #finlit tweets for a chance to win a $25 VISA® Gift Card. For full details and rules, click here.
  • Topics for your blog entries:
    • How you learned about financial literacy
    • How you are teaching your children about money
    • How your parents taught you to save money
    • What “financial security” means to you
    • How you are currently saving for retirement
    • Describe one thing you could change to help you be better prepared for retirement


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