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Things Your Bank Won't Tell You

There are a few useful tips from these two Reader's Digest articles: 13 Things Your Bank Won't Tell You and 7 More Secrets from Your Bank. For those who don't like reward checking accounts, you might appreciate this from the secret list:
If you’re using your ATM card for debit transactions, ask your bank what kind of protection it offers if the card is stolen or lost. Thousands of dollars could be pulled from your checking account and, in many cases, you wouldn't be nearly as protected as you would be with a stolen credit card

Another good one on the secret list is that "you can get practically any fee waived if you ask, especially if you're a longtime customer." Most of the others I didn't find too useful as a saver, so I thought I could come up with a list of things related to savings accounts and CDs that banks won't tell you. Some of these may be in the small print, but they're rarely disclosed in a clear way. This is from my experience. If you have others, please leave a comment.

1. If you close a CD during the grace period rather than renew it, you may not receive interest during the grace period.

2. Early withdrawal penalties for CDs are often more severe than 6 months of interest. I've seen penalties as high as half of the term which would be 30 months of interest for a 60-month term. Early withdrawal penalties are often only listed deep inside the disclosure.

3. CD rates don't always lock at the time of the application but when the bank receives your funds.

4. The rates that take effect when you let a CD automatically renew can be much lower than the currently advertised rates. The advertised rates are often only for special CDs. The regular rates are typically much lower.

5. Banks often don't specify POD or ITF correctly for purposes of additional FDIC coverage (see post).

6. CD rates are negotiable. You often can get a higher rate than what's listed. You'll have a better chance if you have evidence of a higher rate from a competitor bank.

7. The rate on your savings account may be much lower than what the bank is advertising. Many banks keep coming out with new versions of savings accounts with high rates. They cut rates substantially on the old savings accounts. Banks which have a history of this include AmTrustDirect and KeyDirect.

8. Some banks do a hard credit inquiry when you apply for a deposit account. This can temporarily ding your credit score.

9. You can lose 2 to 4 days of interest (and sometimes more) when you initiate ACH transfers at some online banks. When you initiate the transfer, the money is withdrawn from the source account two to four days before it's deposited in the destination account.

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  |     |   Comment #1
8. Some banks do a hard credit inquiry when you apply for a deposit account. This can temporarily ding your credit score.

On what basis is a hard pull done? What credit is being sought?
  |     |   Comment #2
All these points are VERIFIED true by me. As an example of just one (credit scores)...In Sept 2008 I had a score of 825! Not Bad! In the last month, I, as usual paid all Cards off as usual each month and typically 19 days early...applied for no loans, appled for/nor got any new cards...and all the usual. The ONLY thing we did was to apply for 2 new deposit bank accounts...one ws actually aRENEWAL CD at State Farm (they always gove new Acct Nos, a new StateFram Bank Checking..but we already had for many years several large CD's @ SF...and , of yes, a CD came due at Cap 1. We did xfer about 10K out of the maturing balance to a Cap1 MM account, otherwise renewed the CD.

Other stuff, no applying for say new Insurance quotes, mortgages..nothing. The result...not the end of the world, but old Credit score dropped from 825 to 790! Oh, by the way, of score had been 800 Plus for over 2 years. Nice
  |     |   Comment #3
anonymous #2, your score should not have dropped 35 points for one hard inquiry; you should review your credit report to make sure there isn't something amiss.
  |     |   Comment #4
30% of your credit score is based upon capacity, so if due to the nature of timing when your bureau was pulled and your cards had a balance (prior to you paying off) this will lower your score. Closer you are to having cards maxed, the lower your capacity. A very key componenant of all empircal credit bureau scores. Timing is key, so even if you are a full balance payoff person, based on when that's received or not can make a big swing visible.
  |     |   Comment #5
I realized that I could only earn interest after the check clear when I deposited checks on my Bank of America Money Market account. I asked big banks, such as Citibank and Wachobia, they said same way; however, Amtrust, National City, U.S.Century, FLcapital, I deal with, give me interest from the day I deposit. Some banks have time line though. Especially, I deposit weekend and lose 5 days interest. What a Big different.
  |     |   Comment #6
citi gold give me interest from the day I deposit.
  |     |   Comment #7
Always check that when you *call* your bank to negotiate a rate (e.g., CD matures and you renew it) that it's renewed at the rate they quote you on the phone. Countrywide tried the bait-and-switch: they quoted me one rate on the phone and when I checked online they'd updated my CD at a lower rate. This was done within 10 minutes of talking to a rep on the phone. ALWAYS CHECK AFTER A PHONE CALL. Better yet do it online for yourself if the rates are the same as when you speak to a rep on the phone.
  |     |   Comment #8
Excellent points about debit cards not being near as secure as credit cards. I cut up my debit cards and only use Credit and ATM cards. Also, you are right that the ACH delays are another way banks make money off those who are not good at math. For large amounts of money, wire transfers can be woth the money. Some people have reported no loss of interest when they mail a check to open a CD rather than using ACH.

Finally, another secret is that banks use actuaries to calculate the odds that people using rewards checking will **** up one month and not make the required number of debits. This can reduce the effective APY by an entire percentage point if you do it only once! Unless you have tons of time on your hands, rewards checking accounts often do not pay off from an actuarial point of view. Thanks for nothing mh83- sfchris
  |     |   Comment #9
A recent true story about Bank of America and NOT waiving fees for a longtime customer (20+ years).

In the past, I had a BofA mortgage. So their reps along the way pushed me to switch my prior, regular free BofA checking to their premium Prima checking account, which has a variety of perks but was free with a mortage or large balance. And even after I no longer had the BofA mortgage, my local branch specifically told me they wanted to keep waiving the fees so I'd keep the Prima accounts and not revert back to regular free checking, which was fine with me.

So the other week, I get a letter from corporate BofA saying they will no longer waive the fees on my Prima checking. I call customer service, speak with a supervisor, and ask either of two things: 1) given that I'm a 20+ year BofA customer with a perfect banking record with them, please continue waiving the fees. Or 2) if you can't do that, please convert my Prima account to one of their existing free (no monthly service charge) checking accounts.

Well, the answer to No. 1 was cannot do, system won't allow it. And the answer to No. 2 was cannot do, only can convert to a regular checking account with monthly fees.

When I pointed out that BofA then and now was offering and advertising no-fee My Access checking for new accounts opened online, she acknowledged that. But insisted since mine was not a new account nor being opened online, she couldn't do that.

So I pointed out I could simply close both of my existing Prima accounts and then open an entirely new free My Access account online and I'd still end up with a free account... just have the hassle to change account numbers and checks. And she agreed, yes, I could certainly do that. But she couldn't do the same thing with any kind of conversion of my existing account.

So, that's exactly what I've done, close my prior BofA checking accounts and open a new free account online (because I want to keep access to their broad ATM network). But the whole experience made me decide no matter what happens in the future, I'm finished using BofA as my primary banking relationship.

Too many other banks out there willing to work harder, and exercise some common sense, in keeping a (now former) 20+ year customer. Thanks BofA.
  |     |   Comment #10
I just had a new experience for me. I made transfer using 3RD Federals site withdrawing $2000 from my Wachovia checking account and transferring it to my 3rd Fed account. I got an email from 3rd Fed saying it was completed. 2 days later they put a 14 day hold on the money-with no written notice to me.
I am a long time customer with about $30,000 in other accounts there. I called and asked why the hold. They said Wachovia had sent a paper check to them and they were an out of state bank. My Wachovia branch is local. They sent it from Columbus-but 3rd Fed has banks in Columbus too. I never heard of such a hold put on online funds transfer on an account that is over 3 years old. They refused to budge and indeed hung up on me when I insisted they remove the hold.

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