How to Choose a Bank
When hiding your money in a piggy bank or under your mattress is no longer a plausible option, it’s time to start looking for a bank. With so many options out there (local banks, national banks, credit unions, etc.), how do you know which to choose? It’s important to ask yourself some questions about what you want from your bank before deciding.
- How often will you need to stop at the bank? If this will be a regular part of your daily or weekly routine, you’ll want to choose one that has a convenient location for you.
- Do you travel often? If so, is it necessary for you to be able to access your bank in person? You might want to choose a bank with locations covering the entire country.
- Do the bank’s hours fit your schedule? If not, do they offer the right online banking options for you to use after hours?
- Most banks do offer online banking. You can check your current balances, transfer money between accounts, and even pay your bills. Most often, this service will be free. If not, you may want to avoid using that particular bank.
- You’ll want to compare available interest rates; they will differ across the board, and there will be different requirements to meet in order to qualify for the offered rates. For example, most banks require a minimum balance of $10,000 to receive the best interest rate for a money market account. The bank that I use only requires $2500 to get the market rate. Quite a difference.
- Does the bank offer interest-bearing checking accounts? These ones typically require a minimum balance just like most savings accounts, but if this is a priority for you, look for a bank that provides this service.
- Does the bank charge service fees? What is their overdraft fee? How much do they charge if you go below a minimum required balance? Do they charge you for using a different bank’s ATM (in which case, you’ll pay that bank’s ATM fee and your bank’s fee as well)? If you’re likely to end up in these situations, you should find the bank with the lowest fees.
- Will you be opening more than one account, such as a checking and a savings? Is it important for them to be linked together? Or do you simply prefer the ability to easily transfer money between them online? You’ll want to choose a bank that offers the best rates across the board so you get the most out of it. You may have to sacrifice in a few areas; for example, you might accept a couple points less in interest on your savings than you’d get at another bank if the checking benefits are better at this bank.
- Is the customer service good? How were you treated when you asked for information on accounts? How did the other customers appear to be treated? Ask for people’s opinions to help you get a better view of the overall picture.
- Is the bank FDIC insured? If so, your deposits are protected up to $100,000. If the bank is not, don’t bother.
You’ll be doing a lot of reading and asking a lot of questions. Don’t be afraid to take your time and explore every option before you choose a bank—you want to be sure you’re getting the best benefits to meet your banking needs and wants.