How you can get the most for your banking dollar?

Ask about checking accounts:

Don't buy loan insurance from the bank. Credit life or disability insurance is often routinely included on loan forms and added to the cost of your loan. Don't sign any such policy when you take out a loan. This insurance benefits the bank, not you. It covers the bank for the balance of your loan should you die or become disabled. You can get more coverage from an insurance agent for half (or even less) of what the bank charges.

Avoid installment loans. These loans are front end loaded. Even though your balance is declining, you're still paying interest on the original balance throughout the term of the loan. Ask for a single payment note with simple interest and monthly payments. If you do have an installment loan, don't pay it off early this actually adds to its real cost.

Pay attention to interest computations. Most people compare rates and assume higher is better. Look for interest figured on a day-of-deposit to day-of-withdrawal basis, compounded daily.

Avoid cash machines. The farther bankers can keep you from their tellers and loan officers, the more money they'll make and the less responsive they'll be to your needs. Bankers like machines because a person can’t argue with them.

Negotiate interest rates. This sounds simple, but it means combating banks' tendencies to lump loans in categories-commercial, mortgage, retail, etc. For example, banks offer a longtime depositor the same interest rate on a car loan as they do a complete newcomer. But often all it takes to get a better rate is to say "I think my car loan should be 2% lower. I've been banking here for 15 years and I have $10,000 in my savings account."

Forget FDIC security. Given the option of a higher interest rate investment with a secure major corporation that probably has more reserves than the FDIC, many people will still automatically opt for the bank investment because of FDIC insurance. But the FDIC has only $16 billion in reserves. That's a miniscule portion of the money it's insuring. Now that more and more banks are closing every year, the FDIC may soon find itself in big trouble.

Ignore the banks amortization schedule for mortgages. When you make your monthly payment, especially in the early part of your mortgage, very little goes toward the principal. However, if you choose to pay a small amount extra every month, this will go toward the principal and save you an enormous amount of money.

Don't put all your money in one certificate of deposit. Now that you can deposit as little as $1,000 for the money-market rate, split your deposits so that you get the same interest rate and more liquidity. If you put your money into a $10,000 or $20,000 CD and then find you need to take out $1,000 or $2,000, you will have to pay a horrendous penalty. Instead buy ten or 20 $1,000 CDs.