Arrowhead credit union free checking

Good deals at local banks await megamerger refugees.

The metamorphosis of Redlands Federal Bank into Glendale Federal and then Cal Fed--all in a year and a half--gave Arrowhead Credit Union in San Bernadino, Cal., a golden opportunity. To win away the bank's mergerweary customers, Arrowhead president Larry Sharp expanded the credit union's geographical range and began offering free checking accounts, including free checks and ATM withdrawals. In two years, Arrowhead has grown 25%, adding 8,500 members this year alone.

Small banks and credit unions have traditionally charged lower fees. But when competitors are sold to or merged with out-of-state banks, local banks can lure customers away with sweet deals, including free checking accounts and sign-up bonuses. Before you order checks with a new bank logo or acquiesce to a new schedule of fees, scout the local institutions for deals like these:

* First American Bank in suburban Chicago pays you $50 when you open a checking account if you bring in your old checks and ATM card. The account is free and requires no minimum balance, plus you pay no ATM fees and are reimbursed for up to four surcharges a month when you use another bank's ATM.

* Union Bank, in California, pays a $50 sign-up bonus when you open a free electronic banking account. Though intended for customers who bank by ATM, phone and computer, you can visit a teller four times a month without charge.

* Bay Financial in Tampa offers free interest-bearing checking with a $500 minimum balance. The account pays 3.32% on balances above $1,000.