FDIC and NCUA insurance important when considering savings accounts

Consumers may consider a number of options when picking a new savings account, including its yield and fees, especially as new federal regulations cause banks to look for different ways to make up losses.

A recent report from U.S. News and World Report Money's Jim Wang noted there are a number of factors consumers may consider when looking at a new savings account.

The first thing they should check is if the banking institution is insured by the Federal Deposit Insurance Corp. Credit unions should have backing from the National Credit Union Administration.

"FDIC and NCUA insurance protect up to $250,000 per depositor and if a financial institution doesn't have that protection, pass on it," Wang wrote. "There's no reason why you should put your savings in a bank that isn't insured."

Interest rates are another factor, and banks may offer a promotional period that lasts a set amount of time. Wang said consumers should make sure the "post-teaser" level is comparable to other offers.

Potential fees also present a concern and these charges may be connected to how much money is in an account. Some savings accounts, for example, require that a specified minimum balance be maintained to avoid a monthly fee.

Posted in: Certificate of Deposit, Money Market, Savings Accounts

Certificate of Deposit News: This article was published on 9-24-2010 at 10:55 am.

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