Today, Paula and Jon are joined by Sue, a banking expert who will walk us through the different types of bank accounts. We start with an explanation of FDIC insurance, and what that means (given recent events in the news).

To find out more about the coverage in your accounts, you can visit the “Edie” tool on the FDIC website here: https://edie.fdic.gov/

Many banks offer the same products, but Sue says if you want to have a more personal relationship with your institution, you should consider a community bank instead of a larger one.

In terms of fees, there are fees for not keeping a minimum balance on some accounts, and of course overdraft fees. Paula, Sue, and Jon discuss where overdraft protection comes in and when/where that might be appropriate for you. Ideally, you never want to overdraft your account, but it can happen.

Next, we talk about the differences between savings and money market accounts. Savings accounts typically have a lower balance requirement, but don’t pay as high an interest rate. One idea is to keep one of each – and try to leave the money market account separate from your savings. Even if it is liquid and accessible, you’d ideally like to leave the money that’s earning more interest alone!

There are also CDs or certificates of deposit. CDs typically pay a higher interest rate than money market and savings accounts, but you committed to a predetermined time period. Withdrawing funds early can result in a penalty.

Finally, we talk about credit vs debit cards. Credit cards are easier to recover from fraudulent use, and can earn perks like airline miles, but you need to be able to pay off the balance every month.
Need help with your financial future? Learn more about Paula and her work at PaulaChristine.com or send her an email: Paula@PaualChristine.com