When it comes to your Social Security check, deciding where it goes is just as important as deciding to receive it in the first place. But with so many bank accounts available, how do you know which one is right for you?
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GOBankingRates spoke with Rachael P., a bank teller with years of experience, to get the inside scoop on the best accounts for your hard-earned benefits. Here are seven bank accounts she believes are the best places to deposit your Social Security check.
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Free checking accounts
“First things first: You don’t want your benefits to be eaten up by fees,” Rachael said. “Look for accounts that have no monthly maintenance fees, especially for seniors – they exist and they’re great.”
Today, many banks offer fee-free checking accounts for customers who cash their Social Security checks via direct deposit. These accounts often come with other benefits, such as free checks and no minimum balance requirements. Ask your bank which account is right for you. And if your bank doesn’t have one, shop around.
High-interest savings accounts
Although you probably use most of your Social Security benefits for everyday expenses, it makes sense to keep some of it aside.
“High-yield savings accounts can help your money grow a little faster,” Rachael continued. “Even a slightly higher interest rate can make a difference over time.”
Online banks often offer the best interest rates on these accounts, so be sure to look beyond your local branch.
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Senior-specific accounts
Some banks offer accounts specifically tailored to retirees and those on welfare. “These accounts often come with perks like free money orders and notary services, so it’s worth looking into,” explains Rachael.
Pro tip: Be sure to read the fine print. Some accounts may have minimum balance requirements or other terms you must meet to get the best benefits.
Second chance checking accounts
If you have had problems with banking in the past, you should not be locked out of banking now.
“A second chance checking account can be a lifesaver for people who have had problems with overdrawing their accounts,” Rachael said.
These accounts often have lower fees and less stringent requirements, making them a great way to get your banking back under control.
Again, it’s a good idea to shop around and make sure you get the right account for you.
Joint accounts
For couples receiving benefits, a joint account can make things much easier.
“Many people have joint accounts to pay for household expenses,” Rachael explained. “Just make sure you’re both on the same page about how the money will be used – I’ve had this problem with my husband in the past!”
Look for joint accounts that offer features like online bill pay and mobile check deposit to make managing your funds even easier.
Money market accounts
If you want a little more flexibility, consider a money market account.
“These accounts often offer higher interest rates than regular savings accounts and you can usually write checks from them too,” Rachael added.
However, keep in mind that money market accounts may have higher minimum balance requirements, so make sure they fit your financial situation.
Certificate of Deposit Accounts (CD Accounts)
For any part of your Social Security that you don’t need immediately, a CD could be a good option.
According to Rachael, “CDs typically offer higher interest rates than savings accounts, especially if you are willing to invest your money for a while.”
Consider setting up a CD ladder with different maturity dates to balance higher interest rates with accessibility.
Tips for choosing the right account
Now that we’ve discussed some of the best options, here are a few tips from Rachael to help you make the right choice:
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Compare fees: “Even small fees can add up over time, so make sure you know exactly what’s happening with your account,” recommends Rachael.
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Read the fine print: Make sure you understand all the terms, including any requirements for fee waivers or interest earnings. These can be tricky, so ask the bank teller or a financially savvy friend for help if you want.
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Consider accessibility: Rachael suggested: “Think about how you prefer to do your banking – in person, online or through a mobile app – and choose an account that suits you.”
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Look for FDIC insurance: Seems obvious, but some people overlook it. Just make sure any bank you consider is FDIC insured to protect your money.
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Ask for discounts: Some accounts offer extras such as free safety deposit boxes or discounts on other banking services.
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This article originally appeared on GOBankingRates.com: I’m a Bank Teller: The 7 Best Bank Accounts for Depositing Your Social Security Check
