MONEY

Best banks 2012

Sick and tired of being nickel-and-dimed? Take your deposits to one of Money magazine’s award winners. These category leaders make it easy to avoid fees, get good interest rates and offer great extras.

  • U.S. Bank

    Minimums to avoid fees on basic accounts
    :
    • $1,500 monthly balance or $500 monthly direct deposit for basic check
    ing
    • $300 balance for basic sa
    vings
    • $1,000 balance for money-market account

    Interest rates
    :
    • 0.05% on basic savi
    ngs
    • 0.05% on up to $10,000; 0.10% for $10,000 and up via money-market account

    Why it’s a winner for basic accounts: None of the mammoth banks offer truly free checking, but U.S. Bank — fourth by number of branches — waives the $7 to $11 monthly charge on its basic checking accounts with a relatively low direct deposit, an easier hurdle than the minimum balance since you can set it and forget it.

    Other fees are lower than those of peer banks (for example, $2.50 to use an out-of-network ATM compared to $3). Plus, the bank is among only a handful offering remote check deposit via its mobile app.

    Best of all? U.S. Bank ranked first for employee professionalism and competence in this year’s ath Power Ideal Banking study.

    Caveat: A measly rate on saving — less than the industry average of 0.12%. But other big banks are paying even less.

    Why it’s a winner for senior checking: The simplest option for people 65 plus who want free checking from a big brick-and-mortar bank. Though a recent Pew study found that some senior accounts come with sneaky terms, U.S. Bank’s version is in a different league. Seniors are entitled to a Premium Checking account with no maintenance fee (everyone else has to maintain a $5,000 balance or pay up to $13 a month). The account doesn’t levy fees for using another bank’s ATM and comes with free money orders, free cashier’s checks, and a 50% discount on a safe-deposit box. And there’s no minimum to avoid fees.

    Caveat: It doesn’t have some of the perks of our other picks — such as paying interest or reimbursing fees that other banks charge for using their ATMs. Seniors comfortable banking electronically may be better off with Ally’s package.

  • Zions

    Minimums to avoid fees:

    • None on basic checking or Ultimate Savin
    gs
    • $200 daily balance on basic sav
    ings
    • $300 monthly balance on Checkin
    g Plus
    • $2,000 daily balance on Gold Interest Checking

    Interest rates:

    • 0.05% on Gold Interest Checki
    ng
    • 0.08% on basic sav
    ings
    • 0.20% above $5,000 on Ultimate Savings

    Why it’s a winner: Besides having no maintenance fee, Zions’s basic checking has low foreign transaction fees (1%) and cash-back rewards on debit purchases from local merchants. Along with nominal yield, Gold Interest Checking earns you free checks and a safe-deposit box. Rates on Ultimate Savings are competitive.

    Caveats: With basic checking, paper statements aren’t free, and you can write only five checks a month ($2 each thereafter).

  • Ally

    Interest rates:

    • 0.40% up to $15,000; 0.75% for more than $15,000 on checki
    ng
    • 0.95% on savings, any balance.

    Why it’s a winner: Tiptop rates, with no maintenance fees whatsoever. Second-time awardee Ally offers checking account yields higher than what most banks offer on savings; plus its savings account rate is among the industry’s highest. (Online banks have lower overhead than brick-and-mortars, allowing them to provide better terms.)

    You can use any cash machine for free: Ally doesn’t charge you — a common perk from online banks, which don’t have their own ATMs — and also reimburses the other bank’s charges without limit in the U.S. You also get free transfers to and from accounts at other banks. And there’s no mimimum to avoid fees.

    Caveat: Still no remote check deposit, which the bank promised last year. Reps now say the feature will be available by the end of 2012.

    Why it’s a winner for 1-year CDs: Front-of-the-pack rates — just compare them to the average of 0.31% on a one-year CD — and the flexibility to flee as needed if you’re willing to sacrifice 9¢ on $100. You can earn 0.92% on an 11-month CD with no-penalty early withdrawals, or 1.01% on a 12-month CD that charges 60 days of interest for early withdrawals. Plus, there’s no minimum deposit.

    Another perk from Ally: When you open your CD, the bank will give you the best rate within a 10-day window, so you won’t be nailed by a short-term drop in rates or a just-after-you-signed-up spike.

    Caveat: No real advantage to locking your money up right now, since you can get comparable rates with Barclays’ or Ally’s savings accounts.

  • Ally and Barclays

    Minimums to avoid fees:

    • None

    Interest rates:

    • 0.95% at Al
    ly
    • 1% at Barclays

    Why they’re winners: Top interest rates make these online options ideal choices for yield chasers seeking a standalone savings account. Barclays’ savings account for U.S. customers had the highest rate of all banks surveyed.

    But Ally wasn’t far behind and consistently provides among the industry’s highest yields. (The interest rate dropped only minimally, from 1.04%, since last year.) And both accounts are no-fuss, with neither a maintenance fee nor a minimum.

    Caveat: Barclays is untested, since the account just launched in May. Ally’s rate is a bit lower but at least has history behind it.

  • Capital One

    Minimums to avoid fees:

    • $300 daily balance or $250 monthly direct deposit for Rewards Checki
    ng
    • $1,500 monthly balance or $1,000 direct deposit for Premier Rewards Chec
    king
    • $5,000 monthly balance for High Yield Free Checking

    Interest rates:

    • 1% on High Yield Checking balances up to $100,000

    Why it’s a winner: Brick-and-mortar checking accounts that come with impressive extras — and no linked accounts required, so you’re free to shop around for the best savings rates. Capital One’s tiered accounts provide plenty of options for avoiding fees.

    Also, Rewards Checking and Premier Rewards Checking allow you to earn points on certain debit purchases; these can be turned in for cash, travel, or gift cards. (The earn rate on Premier Rewards is double that of Rewards Checking.)

    Meanwhile, High Yield Checking earns a starter interest rate on par with the highest savings offerings elsewhere, reimburses up to $15 of other banks’ ATM fees a month, charges no foreign transaction fee, and offers free checks. Capital One also ranked highly for customer service and satisfaction in this year’s ath Power Ideal Banking study.

    Caveat: The 1% APY on High Yield Checking is locked in only for one year. Since the account was just launched last September, there’s no precedent to know what the rate will be after the lock period.

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