Your Banks

[Smellincoffee]

How do you handle your money? Do you have multiple accounts at one bank, or use multiple institutions? How much of your savings is in a regular 'account', and how much do you have in investments like real states, stocks, bonds, and precious metals?

When I started my first job, I opened up a checking account at the same bank (AmSouth) my parents used, because they offered free checking. In the seven years since, that bank has been bought out twice, once by RBC and again by PNC. I save a lot more of my money than I did back then, but it's all in my checking account, so I'm considering opening a savings account. But the news of the last few years has me concerned; there seems to be a lot of questionable stuff going on with the banks, and I'm wary about entrusting "big commercial banks" with my savings. I've been toying with the idea of opening a savings account with a local-only bank, one that an acquaintance of mine is the president of. I know that money is used in the local community, and localism is important to me. It's why I avoid using chain stores whenever possible, because they just channel local money to some other place. I'm also open to community credit unions. This is why I am curious about other people's banking practices: I want to learn what the benefits and limitations are.

Also, if anyone reading is savvy about banks, can you answer...
- how do banks afford supporting free checking accounts? Are they just the lure used to attract people to one bank, in the hopes that they'll open up savings accounts or credit lines that do generate profit for the institution?
- what sources are there for finding out how reputable a given bank is?
- how can someone learn about how banks operate? Is there a Banking for Dummies type book out there? (There is, by that title, but I'd prefer something with a more conventional title. )

 

[Civ'ed]

I don't know what option to select. I keep my money with a Kantonalbank (Swiss Cantonal Bank) and naturally each canton has its own. So it's sort of a national local bank, if that makes sense.
The majority of my savings are in said account.
Of course, Switzerland, so... yeah. No idea how it works. But it's secure as hell.

 

[The_J]

Is the 4th poll option meant to include the first 3, or is it meant to be ticked additionally?

I have a saving and a checking account at a community credit union in Germany, another saving account at another union (these just were the 2 small banks in our town, and my father was traditionally at one of them, my mother at the other), and a checking account at a national bank in the Netherlands.
There's also an equity fund at the first, I think.

Guess I might have to simplify this at some point, but stuff like e.g. my Paypal and Amazon account are bound to the German checking account, so re-organizing it would probably require quite some time.

 

[rugbyLEAGUEfan]

I have the majority of my wages paid into a savings account which gets extra interest if you don't make withdrawals. That just sits there and hasn't been touched in years except for some larger withdrawals for a building project. Bank interest is pretty crappy but I used to be a pretty bad gambler so I'm in no position to allow myself to invest in the stock market etc. But it's a decent enough rate and principal that compound interest, well it seems this way to me, appears to kick in nicely.

The remainder of my wages plus some rent I receive goes into another account which automatically transfers $50 a day into my ATM card for living expenses. What's left over from this has my rent, utilities, car and health insurance etc automatically debited from it so basically serves no purpose savings wise.

 

[Smellincoffee]

Is the 4th poll option meant to include the first 3, or is it meant to be ticked additionally?

It's redundant in retrospect. I included it just in case there were options I hadn't considered, being somewhat new to personal finance.

 

[JollyRoger]

My personal banker is an ATM machine.

 

[Tahuti]

I have a checking and savings account, and I used to have a stock trading account, all on the same bank, which is co-operative.

 

[Tee Kay]

If I have my way I'd deal entirely with cowrie shells.

 

[rugbyLEAGUEfan]

If I have my way I'd deal entirely with cowrie shells.

My conches would totally own your cowries.

Actually forget that....giant clam shells FTW

 

[Valka D'Ur]

You forgot the "I keep my money in a sock under my mattress" option.

Banks are a necessary evil. For privacy's sake, I'm not stating what I do, but I will say there is a very nice lady who works at my bank - she has cats, and we swap cat stories and tips while she tends to my transactions.

 

[Cutlass]

I had a community bank. It merged with a few other community banks and became a regional bank. And then got bought by a larger bank. With each change it became worse. Now I keep my accounts at a credit union.

 

[Lambert Simnel]

Also, if anyone reading is savvy about banks, can you answer...
- how do banks afford supporting free checking accounts? Are they just the lure used to attract people to one bank, in the hopes that they'll open up savings accounts or credit lines that do generate profit for the institution?
- what sources are there for finding out how reputable a given bank is?
- how can someone learn about how banks operate? Is there a Banking for Dummies type book out there? (There is, by that title, but I'd prefer something with a more conventional title. )

I don''t know about being savvy, but I do work in one...

Free checking accounts are indeed effectively loss-leaders, but often with significant charges if you go into overdraft, bounce a cheque, whatever.

Banks are subject to ratings from the likes of Moody's, Fitch and S&P - but that tells you really about how secure they are, not whether they're reputable or not. In terms of customer service, bad experiences etc, then google is your friend. In the UK a site such as moneysavingexpert.com is a good place to look for recommendations.

How banks operate? Wikipedia is a good place to start. You're probably more interested in retail banks than investment banks (where the allegedly fat greedy bastards work) but both are a fundamental part of the working of a modern day capitalist system.

 

[Quackers]

For your final question

Yeah private entities create money. Mind blown.

 

[Cutlass]

For your final question

Yeah private entities create money. Mind blown.

The irony here is that there are a lot of people out there demanding that we ban that system in favor of what they call "market based money"

 

[Silurian]

For your final question

Yeah private entities create money. Mind blown.

If banks did not make money by lending your deposit they would make it in fees for storing it for you.

 

[SS-18 ICBM]

TD Bank is among the largest banks in Canada. I have a checking and savings account with them.

 

[downtown]

I use a large, national bank (checking and savings account), and also put money into a 401(k) I'm not opposed to moving to a credit union though.

 

[Tahuti]

If banks did not make money by lending your deposit they would make it in fees for storing it for you.

Which would lead to more consumer spending. Especially if there is no legal tender, and the bank can decide that money HAS to be on your checking account.

 

[Silurian]

Which would lead to more consumer spending. Especially if there is no legal tender, and the bank can decide that money HAS to be on your checking account.

Well it would depend on what the bank charged for looking after your money.

If the bank decided to charge a high annual fee it would discourage people with small average holdings from having a bank account. If you are putting $50 a week under your mattress to pay for future bills you are more likely to get the odd $20 out when you want too.

If the bank decided to make money by high transaction fees, charging you each time you deposit money, every time you withdraw money etc then people will tend to minimise their transactions. People will switch to cash and fewer card transactions. This could well reduce impulse consumer spending.

If the bank decided to charge a negative interest rate everyone would be discouraged from leaving their money in the bank. This would be better for people with small deposits in the short term. People with more money would be incentivised to "invest" their money overseas, but gold etc rather than leave it in the bank. A foreign bank paying 0% interest would look attractive. So there would be less money to go around. With the average size of deposits declining the negative interest rate would have to be increased which would push more people out of the bank.

 

[JollyRoger]

Bankstas are gamblers needing deposits to gamble with. Of course they aren't going to charge you for feeding their addiction unless you come across as a mark willing to do so.