10 things your bank won't tell you

8. "Your money might be better off elsewhere."

Banks offer lots of ways to earn interest on your money. Among them are simple savings accounts, certificates of deposit, money market accounts and individual retirement accounts. But they don't always yield the best return. The average savings account, for example, pays about 0.5% interest. But even in this low-interest-rate climate, you can do better -- 3% or more -- if you shop around.

"It pays to be a free agent," says Bankrate.com's McBride. "There is tremendous disparity in the returns available."

Banks have been expanding into other financial services for a decade or more, including comprehensive wealth management and financial planning, brokerage services and even insurance. The well-off who use these services are a bank's most profitable customers, as they keep the highest balances and are least sensitive to fees, says Maryann Johnson, the senior vice president of wealth market management at the bankers association.

That's something to remember when you talk to a bank's investment advisers: Many are paid a commission on investment products, says certified financial planner Craig DuVarney, meaning they often go for the easy sales.

"They don't have the harder discussion about estate planning, tax bracket and liquidity," DuVarney says.

Johnson sees it differently. She says that banks take a more holistic approach and that their wealth managers serve much the same purpose as financial advisers, with bonuses not only for sales but also for dollars invested, new clients and even customer retention.

9. "When it comes to banks, smaller is sometimes better."

Banks have been consolidating like crazy over the past decade. In 1990, the top 10 banks controlled 25% of the market; now they have half. This gives customers of large banks vast networks of free ATMs and branches across the country. And in the current financial crisis, a tide of failing banks has led to even-greater consolidation among the industry's biggest players.

Despite the conveniences of a broader network, such consolidation hasn't been entirely good for consumers, says Arthur E. Wilmarth Jr., a professor at George Washington University Law School. Though big banks may have more to offer, those conveniences can come at a price: high fees. In 2006, the 10 largest banks generated 54% of revenue from fees and service charges. By contrast, the 10 smallest banks generated just 28% from those sources.

Not only do big banks bring in more fee income, but they also pay out less interest. According to Federal Deposit Insurance Corp. data, smaller banks generally pay higher interest on savings accounts and other products. For example, in 2006, the 10 largest banks paid an average 1.87% in interest for savings accounts, while the smallest banks paid 4.37%.

"The largest banks are no longer worried about being undercut on price," Wilmarth says.

10. "Your online account information isn't necessarily accurate."

Online banking has changed the way people handle their finances. They can pay bills online, transfer funds, track payments and get a more detailed view of their bank accounts than ever before. Unfortunately, it may not always show the proper balance.

With electronic transactions, ATMs, check cards and direct deposits, banking has gotten more complicated. ATMs and online bank statements will show deposits available before the money is actually in your account. Using your debit card at a gas station or to reserve a hotel room, for example, can put a hold on funds. Some merchants may be slow to send in charges. And banks can sit on deposits, so an out-of-state check may take up to five days or longer to clear.

Add to that the constant reordering of debits, and your account balance can quickly become a moving target that's hard to track accurately day to day.

"Banks use different algorithms to process payments than what you see online," Harvard's McGovern says. "It gives you a false sense of security."

This article was written by Jim Rendon for SmartMoney.

Updated March 26, 2009

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