THE BANK BOOK: How to Get the Most for Your Banking Dollars

Deregulation and the merchandising skills of depository institutions have made the financial marketplace a puzzlement, even for fiscal sophisticates. In addition to reliable, by-the-numbers guidance for the perplexed, this text (prepared under the aegis of the Consumer Federation of America) provides the disclosure that banks and other intermediaries probably ought to furnish on their own. Hoffman (economics/Elmira) and Brobeck (executive director of the CFA) offer a step-by-step overview that touches all the bases of interest to retail banking customers. Their coverage runs from ATMs (automated teller machines) through checking and NOW (negotiated order of withdrawal) accounts, the realities of electronic funds transfer, savings options (including non-bank possibilities like money-market funds), installment loans, home mortgages, debit as well as credit cards, and procedures for resolving complaints. With a refreshing lack of bombast, the authors address such workaday frustrations as opening a money-market deposit account whose double-digit return evanesces in a matter of weeks, waiting up to two weeks to gain access to deposits, and paying $20 or more for a cheek bounced because of uncollected funds. They also document a wealth of new and/or increased transaction fees. Among other things, a nationwide survey that Hoffman and Brobeck conducted to develop cost comparisons turned up charges for phone calls to check balances and penalties imposed on passbook accounts that fall below stipulated levels. Their poll yielded valuable tabulations of the rates for consumer credit of various kinds at major institutions throughout the country. At year-end 1985, for example, there was a spread of 200 basis points in the interest charged by New York City banks for personal loans. On the other side of the coin, Messrs. Hoffman and Brobeck caution that those who lend to banks (e.g., via savings accounts or certificates of deposit) would be well advised to check whether their institutions operate (as many do) on a 360-day year for purposes of calculating interest. In the event, the authors include a short list of banks that pay top returns on CDs with maturities ranging from 30 days to five or more years. The Hoffman/Brobeck briefing delivers useful, dependable counsel that should help consumers shop wisely and well for bank services in a brave new high-tech world where neighborhood branches are going the way of the comer drugstore.