New rules from the Federal Reserve will prohibit banks from charging overdraft fees unless customers consent to overdraft service on ATM and debit card transactions. That’s good news to people who want to keep more funds in savings and checking accounts.

“The final overdraft rules represent an important step forward in consumer protection,” said Federal Reserve Chairman Ben S. Bernanke in a statement. “Both new and existing account holders will be able to make informed decisions about whether to sign up for an overdraft service.”

Changes coming about because of the new rules include:

• Banks must send customers notices that explains overdraft services, fees, and the right to opt out
• Banks can’t discriminate against customers who choose to opt out of overdraft services
• Customers who don’t opt in must receive the same terms and conditions on savings and checking accounts

Banks have come under fire for charging unsuspecting customers overdraft fees. Last year banks received almost $37 billion in overdraft fees, according to Moeb Services Inc., a research firm. The Federal Reserve said consumer testing indicates most people don’t want overdraft protection on ATM and one-time debit transactions unless they opt in first.

Two large banks, JPMorgan Chase and Bank of America, recently changed their procedures for collecting overdraft fees to deal with the backlash from customers and legislators.

If you think you’re paying a lot of interest on your credit card, it may not be as bad as one being offered by First Premier Bank. The Sioux Falls, S.D.-based bank  recently sent a mailing to a potential customer for a pre-approved credit card that offers 79.9% interest and a $300 limit, according to WKYC.com.

Credit card offers with interest rates that high don’t seem to be that common. But such offers from banks are usually targeted at people struggling with their credit. Gordon Hageman, who received the offer, said he doesn’t have the best credit but didn’t think it was that bad. He discovered the high interest rate when reading through the terms of the offer.

In addition to the high interest, First Premier Bank credit card offers can have up to $180 in start up fees, according to Consumer Affairs. Those fees include:

• A $29 set-up fee
• $95 program fee
• $48 annual fee
• $72 participation fee

An important lesson to learn from this situation is to always read through all the terms of any credit card offers you receive from banks. The terms should break down all fees, interest rates, and other features of an account. Also look for information on the grace period for payments and how interest is calculated.

Banks have come under fire for heaping multiple overdraft fees on unsuspecting customers. But a couple of banks are changing their rules in what they say is an attempt to help customers who are struggling financially. Some of the changes include:

• Bank of America won’t charge fees to customers who overdraw their checking accounts by less than $10 a day. The bank also says it plans to charge only up to four overdrafts a day, down from the current 10. The changes take affect next month.
• JP Morgan Chase will clear debit and ATM transactions in the order in which they occur. Many banks have been criticized for clearing the largest transactions first, which often results in customers overdrawing their checking accounts. Customers will be required to sign up for overdraft services if they want that protection. Those changes go into affect early next year.

The rule changes come as some legislators have turned their attention to reining in fees at banks. Overdraft fees are expected to total $38.5 billion this year, according to economic research firm Moebs Services.

You can guard against unnecessary overdraft fees by monitoring your checking account more closely. Also, contact your bank to opt out of automatic overdraft protection.

The Federal Deposit Insurance Corp. (FDIC) saw its insurance fund, which protects bank deposits, fall 20% in the second quarter to $10.4 billion, the lowest level in 16 years. The FDIC, which closed 81 banks this year, said it still has 416 banks on its “problem list,” up from 305 at the end of March.

Despite the drop, you probably don’t have to worry about the money you have deposited in most checking and savings accounts. “While challenges remain, evidence is building that the U.S. economy is starting to grow again,” said FDIC Chairman Sheila Bair. “Banking industry performance is–as always–a lagging indicator. The banking industry, too, can look forward to better times ahead. But, for now, the difficult and necessary process of recognizing loan losses and cleaning up balance sheets continues to be reflected in the industry’s bottom line.”

So what do you need to know about how the decline of the FDIC insurance fund could affect you?

• Banks might be less willing to lend money if they have to pay special fees to get more cash in the fund
• Banks might offer lower interest rates on savings accounts, CDs, and money market accounts
• Make sure to cap deposits to $250,000 or less per depositor for each account

The bottom line is that it’s still safe to deposit money in banks. Look for competitive interest rates on deposits.

It’s important to look for more than the best rates when comparing different bank deals. You also need to examine what types of fees will be involved before signing up for an account. For instance, the largest U.S. banks have raised fees, added new fees, and decreased time limits for triggering fees when banks pay overdrafts, according to a recent survey by the Consumer Federation of America (CFA).

Banks charge a flat fee for overdraft protection, which basically loans money to an account holder when there isn’t enough money to cover transactions such as paying checks, debt card purchases, or ATM withdrawals. In many cases, people receive no notification about the overdraft until after the fact. If they are unable to repay the overdraft amount plus the fee, additional fees may be charged.

The median overdraft fee is $35 for the top 16 U.S. banks. Nine of those banks have a tiered fee system if there is more than one overdraft on an account. Also, 10 of the banks don’t limit the number of overdrafts that can occur in one day, so account holders can get hit with multiple overdraft fees. These fees are so pervasive that U.S. banks are expected to collect $38.5 billion in overdraft fees this year, according to Moebs Services, a research firm.

Don’t just choose an account based on a table of the best rates. Read the fine print of any bank deals you are considering so you understand all the terms.