Choosing a Bank, savings accounts, finance, interests, banking Dunkirk NY

(ARA) - Tired of tiny savings account interest rates? Feel like your bank isn't paying enough for the privilege of using your deposits? If so, it's time to move your money to a place where it will work better for you. Afterall, the whole point of saving is so you can watch your nest egg grow and in the current climate, it's not going to do that at your local bank.

Because of low short term interest rates (the amount banks charge each other for loans) high overhead and rising expenses, local banks simply can't afford to offer competitive rates right now. Here's the proof -- the going rates as of April 2008, according to BankRate.com, the Web's leading aggregator of financial rate information:

Traditional savings account .10
Interest bearing checking account 1.64
Money market account (MMA) 2.29 percent
6 month certificate of deposit (CD) 2.74 percent
1-year CD 2.96 percent

More competitive rates than these are available, but you'll have to move your money to an online bank which has fewer operating expenses to get them. With so many of them out there, however, how do you know which one to choose?

Here are 7 things to consider:

1. Look at the bank's Veribanc rating which assesses it based on the six CAMELS factors: Capital strength, Asset quality, Management ability, Earnings sufficiency, Liquidity, and Sensitivity to market risk. The strongest banks will have a green rating and three stars.

2. Make sure the bank is FDIC insured, meaning depositors are protected in case the bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.

3. Is the bank offering competitive rates? Log on to www.bankrate.com and print out the current rates for the product you are considering to help you make a determination.

4. Determine how long the bank has been in business. If it has been around a long time, this will offer confirmation that the institution has been able to survive multiple downturns in the economy.

5. Find out if the bank charges monthly service fees, if you are required to keep a minimum balance and what happens if you fall below the minimum.

6. Look into how the bank handles deposits. Because there is no branch to visit, determine how long you'll have to wait for checks to clear before you can access your money.

7. Find out how many withdrawals you can you make in a given month. Some banks impose strict limits that may be unacceptable to you.

When you consider all these criteria, you'll discover a bank worth doing business with is Zions Bank, which according to Bankrate.com is currently offering the best money market rate in the country -- 3.25 percent.

Founded on July 10, 1873, Zions, which is a green 3 star bank according to the Veribanc rankings, operates full-service branches in ten Western states - but has online customers throughout the country. "We offer some of the best rates in the country because of our low overhead and customers repeatedly tell us they really appreciate the lack of fees," says Matt Wilcox, the bank's director of marketing.

The bank offers three different types of money market accounts which all have a variable rate of interest compounded daily and paid monthly. Up to 6 transfers can be made every 30 days. An unlimited number of withdrawals can be made in person, by ATM, mail or messenger.

If you don't need access to your money right away, the bank also offers CDs at a higher fixed rate of interest. These can be set up for lengths of time ranging from 90 days to 5 years. Like at a traditional bank, however, there will be penalties for early withdrawal.

To learn more about the investing options offered by Zions Bank, or to set up an account today, log on to www.zionsbank.com.

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