Bank Accounts

You will want to have TWO bank accounts: checking and savings:

Look for low-fee checking account with electronic bill-pay option

-- cheap and easy way to keep track of what bills you've paid, payment history, etc.

-- saves on postage, envelopes, late fees (because it's less time-consuming to pay bills, and you can even schedule them to be paid in advance)

-- set up "pay yourself" first by scheduling an automatic transfer to your savings account after each paycheck is deposited.

--when shopping for a bank, consider your travel habits and ATM fees.

Look for a savings account that pays a competitive interest rate--they can vary a lot, so shopping can really pay off! Credit unions can be a good choice for a savings account. They enjoy certain tax and regulatory advantages that allow them to offer higher interests on savings accounts.

If you need some help with savings discipline: consider Certificates of Deposit, which give you a higher interest rate if you are willing to tie up some of your savings for six months or more.

Checking and savings accounts in banks, savings & loans, and credit unions are all covered by Federal Deposit Insurance. They are safe places to earn modest but predictable rates of return on your savings.

It's really important to have a "rainy day" savings account for unpredictable disasters (e.g., car repairs, unreimbursed medical bills, job layoff.) A common rule of thumb is three months salary, though of course, more is always better.