Some traditional banks are terrific, and many credit unions offer compelling benefits. But you've got other alternatives.
There's always Uncle Cletus, who'll be happy to keep your money for you under his porch. But he has raccoon problems, so he's probably not your best bet. You're not out of luck, though. You can get many or all of your banking needs serviced at places other than traditional banks.
One new development is Internet banks, which have no physical, bricks-and-mortar presence at all. These have become popular in recent years. In addition, many traditional banks are now offering online banking services. These allow you to pay bills, check on your account, and do much more, from the comfort of your computer. Some deposits are mailed in, while many are made via direct deposit. Withdrawals are usually made through other banks' ATMs, with Internet banks often allowing each customer a certain number of free ATM transactions per month.
Also, not everyone realizes it, but many brokerages today are offering banking services. TD Waterhouse is one example. If you have a brokerage account there, any money not invested in securities is "swept" regularly into a money market account, where it will earn more than it would at a bank. In addition, as TD Waterhouse is also a bank, you can enjoy check-writing privileges, credit cards, electronic banking, mortgages, and home equity loans, among other things. Waterhouse even has a host of bricks-and-mortar branch offices around the nation, for times when you have a hankering to talk to a representative in person.
Another nifty advantage of brokerages serving as banks is the availability of margin. Margin is when you borrow money from your brokerage against the value of securities in your brokerage account. This is usually used to buy additional securities, but it needn't be. If you need to borrow a few thousand dollars, you might spend a lot of time getting a loan from your bank. or, through a brokerage-bank, you can simply ask for a check drawn on margin on your account. Easy as that. (There's a little more to margin, though, and it should be used in moderation. Make sure you learn all about it before you use it -- or worse, over-use it.)
Discuss banks on our Online Banking discussion board -- or just pop in to see what others are saying. Our Savings Center is helpful if you're thinking about how to best deploy your short-term moolah. And you can learn all about brokerages and find one that's right for you in our Broker Center.
