A Checking Account for Home Loans
Q: We’re opening a new checking account that will be used only to pay our mortgage. What features should we look for in an account that we won’t be actively using?
A: When you open a new checking account for a special purpose like this, you want to look at two primary factors: fees and convenience. In your particular case, you will likely go back and forth between a balance of a few thousand dollars and close to zero many times during the year. You also will only make a few transactions per month from the account. Of course, interest is a factor – but interest on checking accounts is not very high these days.
Start close to home. Keeping your mortgage payment account under the same roof as your checking, savings and other accounts helps simplify your life. You can do all your deposits and withdrawals at the same time, with just one branch visit, or one visit to an online site. That also means fewer passwords to remember and less time going back and forth between accounts.
Keeping your account with the same credit union can also give you substantial savings on transfer fees. It may cost $20 to execute a wire transfer between two different institutions. But transfers between two accounts at the same credit union are usually free or insignificant. That’s a savings of up to $240 per year!
You also want to keep fees to a minimum. Some accounts charge a fee if your balance falls below a certain level, so you will want to use a free checking account for this purpose or at least keep the minimum balance in the account all the time.
Add an extra layer of protection to your housing funds by opening an Identity Checking account. Your identity checking account comes with Identity theft detection services, free online banking and bill pay, and much more! Open your Identity Checking account now!