I’ll be honest. I don’t like switching bank accounts. I find it a hassle. But every now and then, I discover a reason or reasons so compelling, that the hassle doesn’t bother me. I actually find myself excited about the change. USAA has been just such an experience.

About a year ago, my in-laws told us that we should switch. Being the know-it-all finance guy, I ignored them. Then about a month ago, I randomly decided to check out USAA.com. After about 15 minutes on the site, I was convinced.

A little about USAA

There are a few things that you need to know about USAA

• It’s an online bank. So no physical location to do your banking at.
• It is for military personnel and their families.
• USAA stands for United Services Automobile Association

What convinced me to switch

• Easy to use site
  A lot of bank sites are difficult to use or seem antiquated. USAA.com uses modern web design techniques, social tools, and simplicity to make using the site easy. Now, that’s not to say that you don’t have to sometimes search for an obscure feature, but 98% of the time I easily find what I’m looking for.
• Free checks for life
  They aren’t duplicates, but they are free.
• Host all your accounts with one bank
  USAA is a full-service financial institution. You can have your bank accounts, credit card, auto insurance, home insurance, life insurance, mortgage, auto loan, IRA , brokerage account, 529 college savings plan, etc all at one place. Also, everything is accessible through the one login and user interface.
• Cash back debit card
  If you select “Credit” at check-out, then you earn 1 point for every $2 spent. That is not as much as some credit cards, but this is a debit card. So you don’t have to go into debt and you get rewards like cash back, gift cards, and airline discounts.
• The app, the app, THE APP!
  So I’m a bit of a geek. I love my smartphone. A lot of banks have mobile sites or apps for smartphones. But no one has an app like USAA. I can do just about anything I want, such as transfer funds, pull up my proof of auto insurance if I’m pulled over, and pay bills. If for nothing else, the app makes USAA worth using (if you are a geek like me).
• [email protected]
  This is probably the coolest part of the app. Hence it getting it’s own bullet point. With most online banks, you have to send checks to some distant land and wait for the deposit. USAA allows you to take a picture of the check and the funds are immediately deposited. The whole process takes about two minutes and the money is available to spend. Very cool.

What I don’t like

• You have to be military or have parents who are member
  Fortunately for us, my in-laws are account holders. Basically, I think it’s a shame that not everyone can take advantage of such a great bank. I have a lot of conversations that end like this, “Yeah, we are so happy to have USAA, but you can’t sign-up since you aren’t military. Sorry for getting you all excited.”
• Your overdraft credit line draws in $100 increments
  The overdraft credit line is really a credit card tied to your checking account. By default, any overdrafts draw from your savings account. If you choose to use the credit card, then they only draw in $100 increments. So if you overdraft by $0.01, then $100 is deposited into your account from the credit card. Annoying.
• Only a few mutual fund options
  I’m pretty picky about my mutual funds and USAA only offers four Index funds. So if you are looking to combine all of your accounts into one bank, then you will want to research the investment options available through USAA.

Conclusion

There are a few drawbacks to USAA, but no one is perfect. I was banking with Charles Schwab, which I have definitely liked. USAA, however, seems to go the extra mile and provide the extra features that make banking almost enjoyable. But may that’s just the finance guy in me.

I received an email today from my bank asking me to opt in for overdraft protection. Ignoring for a moment whether or not I should take advantage of a service that costs me $29 to spend money I don’t have, I realized that the email may not be legitimate.

Some background information on overdraft protection

For years, banks have auto-opted all checking account customers into overdraft protection. Meaning, instead of declining a $2.64 expenditure at McDonald’s due to insufficient funds, the bank allows the transaction to go through and charges you in the neighborhood of $30 for the convenience.

The Center for Responsible Lending conducted a survey among consumers and we resoundingly said that we did not want to be auto-opted in.

So new government regulation, effective as of July 1, is requiring all banks to un-enroll everyone unless they opt in to the service.

Opportunity for scammers

Scammers and phishing sites are always looking for prime opportunities to convince unsuspecting consumers pass along personal information such as your social security number or bank account numbers.

The email that I received asked me to follow a link and enter personal information in order to opt in. Having clicked through, I didn’t recognize the site or web address. The top graphic had my bank’s logo and coloring, but that’s easily duplicated. The only ounce of comfort that I saw was the fact that the site was secure (https).

Being the paranoid individual that I am, I closed my window and called my bank. The email was indeed legitimate.

Interestingly enough, banks are varying how you have to opt in. In the case of my bank, I received an email with a link to an opt in form online. My coworker who uses Chase, received a letter asking him to either fill out a form and mail it in or go in to a branch to sign-up.

Call your bank

You will want to make sure that you know how your bank is handling the new Federal regulation. If you have not received notice or have and are unsure whether it’s valid or not, simply call your bank and speak with a representative. They should be able to tell you specifically what they are doing/sending and what information you are required to provide in order to opt in to overdraft protection.

On a side note, you don’t need overdraft protection

Do you really need overdraft protection? Yes, it is very embarrassing to be out with friends or on a date and have the waiter tell you that your card has been declined. But is a $30 charge really worth it?

I recommend one of the following alternatives:

• Overdraft Line of Credit: With both of my banks, I have a small overdraft line of credit. In the event that I go below a zero balance (it happens to all of us), then I am not charged any fees and the purchase is approved. Since I check my balances daily, I payoff the line of credit within 24 hours and incur only pennies in interest at best.
• Proper Budgeting: If you don’t have the money in the bank to spend, then don’t spend it. Enough said.
• Secondary Account: My online bank allows me to have money pulled from a second account at no cost if I spend too much. See if your bank has this option.

In short, don’t pay unnecessary bank fees (i.e. a stupid tax). If you like this post, then consider subscribing to the RSS feed. Thanks!

Everyone wants a safe place to save their money, but if safety was your only priority, you may be tempted to just start a stash under your bed.

Instead, we all want our savings to be safe from a bank collapse and financial disasters, and we want it to be safe from inflation and from being accidentally spent when we come across something we really want. However, while there are great offers on interest rates, fees and bonuses for high interest savings accounts, a savings account is not your only option if you are looking for a safe savings product.

To choose a safe savings product:

• Make sure your safe savings option meets your spending and savings needs as you may need access to your funds and don’t want to be penalized. Plus, if you want the option to grow your savings, then you want to be able to make deposits to your funds.
• Go for no-fee products when possible as even seemingly small fees can eat into your savings over time.
• Look for ease of use as you want to remove all possible obstacles in the way of your savings goals.
• Make sure your safe savings also make a reasonable return. Look for ways to grow your investment since long term savings can be eaten away by the costs such as inflation.

Safe Savings Options

You may have used savings accounts all your life to squirrel away extra funds, but a high interest savings account is no longer your only option to keep your savings safe, not to mention help them keep growing with a safe and guaranteed return. Other safe saving options open to you include:

Certificate of deposit (CD):

• CDs give you a guaranteed return and interest rate. The interest you will earn on your savings in a CD is guaranteed and locked in for the life of the term from the moment you open the account. You can then plan on your returns and even use them to supplement your income while knowing your initial investment will never decrease.
• The more you save the more you can earn. Putting as much of your savings into a safe certificate of deposit as possible ensures the best return as the highest interest rates are offered on the highest balances.
• Restrict your access to help you save for long term goals. As with the highest balance attracting the highest interest rate, so too will a longer term allow you a higher CD rate. Plus, because your savings are locked away in a certificate of deposit account, you are not tempted to spend them, and they keep growing towards your goals and your future. If you do need to access your funds before the end of the term, then you will often be charged cancellation fees and suffer a reduced interest rate.

Money market deposit accounts:

• Offer high yields. A money market deposit account can usually offer you a higher rate of interest on your savings than most CD or ordinary savings accounts.
• Offer few withdrawals. This can often be a condition of the account to help you avoid fees, but it depends on the financial institution which holds the account as some will allow more transactions than others. Restricting your access also helps enforce your savings plan, encouraging you to keep your balance up. However, a money market deposit account is still more like a savings account than a CD as you can withdraw your funds without penalty in most cases.
• Require a high minimum balance. If you do not meet the institution’s minimum balance requirement you will attract more fees on your money market deposit account.

Money market funds:

• You’re investing where the banks invest. The money market is where government, banks and large businesses lend and borrow money for their short term cash needs. This makes a money market fund a safe place for your savings to be invested as you can do so through a well established and secure bank or financial institution.
• You can earn a higher rate on your savings than in a traditional savings account. By investing in a money market fund with an investment company or bank, you can secure high returns on your savings with little risk as those borrowing from the money market usually have a high credit rating.
• You can access your funds within days. There are generally no penalties for accessing the savings you have in a money market fund and the transfer can take a few days to be processed.

Choosing a Safe Savings Investment

High interest savings accounts – and certificate of deposits, money market deposits and money market funds – are all relatively low to no risk investments to help your savings grow until you need them. To help you choose which is the best safe savings option for you, make sure you consider:

• Your savings and cash flow needs. If you think you may need access to some or all of your savings in the near future, choose a short term investment which will allow you access it when you need it, or choose an investment or savings account which does not penalise you for accessing your funds.
• Shop around for the best deal on your savings and on your CDs. There are a range of CD accounts, money market deposits and fund investments available depending on the balance of your savings and the term for which you want to invest. Therefore, make sure you look at all the options available to you on your balance and for your needs because banks and investment institutions offer specials and bonuses to attract your business. So why not take advantage of those offers to help boost your savings safely?

About the Author: Alban is a personal finance writer. He offers advice on personal finance issues and helps people to compare credit cards online.