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Choosing a checking account financial institution: Credit unions or banks?

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Along with paper statements, totally free checking accounts with banks have lost the popularity contest that they had in the late '90s and early 2000s. There used to be signs everywhere about joining for free with no fees. Now banks are sending mail to account holders confirming new mandatory minimum balances.

For account holders who were forced into going from totally free checking accounts to basic checking accounts, pay attention to the minimum balance rates. For example, popular banks, such as Chase, require $500 worth of monthly direct deposits in order to avoid the $12 fee. Or, keep a $1,500 to $5,000 minimum balance. Bank of America requires $250 worth of monthly direct deposits or risk the same $12 fee.

TCF Bank is still holding strong to its totally free checking account. However, with almost 40 locations being shut down in Jewel grocery stores and leaving Cub Foods grocery stores in other midwest locations, they're becoming less convenient to find.

And while some account holders don't need a financial institution to have ATMs and banks on every corner, it begs the question: Why not use credit unions?

Banks aren't the only financial institutions that offer checking accounts. Credit unions also have checking accounts, and sometimes the fees and minimum balances are cheaper. Chicago Municipal Employees Credit Union has a $6 monthly fee for checking accounts that don't have direct deposit or a $3,000 balance. Alliant Credit Union has free checking with no monthly service or balance requirement. First Northern Credit Union and North Side Community Federal Credit Union also don't require a minimum balance. And there are plenty more.

While some people can only join credit unions based on where they work, other credit union memberships are based on geographic location, churches, schools, unions and being related to a credit union member. Before putting your money in an organization be aware of the competition.

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