Choosing a bank is like selecting a spouse. You want the relationship to be long, fruitful and supportive. When you have questions, you want a listening ear and thoughtful advice. When you’re feeling uncertain, you want transparency, clarity and security.
So, how do you identify a financial institution that will meet your needs while helping you grow financially? Whether you’re moving, heading to college or considering breaking up with your current bank — and starting fresh with a new one — here’s how to pick a bank.
[See: Your Month-to-Month Guide to Savings.]
Identify your “type.” Take a moment to evaluate your own financial goals and monetary needs. If, for example, you struggle with navigating online banking programs and prefer face-to-face interactions, then a local brick-and-mortar bank might be the best call. On the other hand, if you’re a quick learner of new technology, then a digital banking company might be better for you.
Different banks have different strengths. Banking customers should consider “how they want to access their money and what they want [the bank] to do for them,” says Debbie Crowder, head of Branch and Premier Banking at SunTrust Bank. “If I’m an ATM-only user, then I should choose a bank that has a network where I spend my life. If it’s online banking [I want], have I test driven some of those sites to see if it seems friendly to me?”
You might find that having a branch location nearby is especially important, or that you need a bank with nationwide ATMs because you travel frequently. Access to 24/7 customer service might be a nonnegotiable for you. Whatever it is, once you’ve identified the kind of institution that matches your banking style, you can start to narrow down options to identify the best bank for you.
[See: Basic Money Lessons You (Probably) Missed in High School.]
Consider accounts and fees. Sit down with a banker or a rate-comparison site and pore over the types of accounts offered and fees charged. “All banks are not created equal, so you need to choose a bank that is ‘fee-friendly’ and won’t charge you a monthly maintenance fee or assess a charge for not carrying a minimum balance,” says Diane Morais, Ally Bank’s president for Consumer and Commercial Banking Products, via email.
Poke around the websites of national banks in your area to find out where branches and ATMs are located — and whether they work for you. For a wider look at rate offerings among financial institutions, head to bankrate.com, which lists regularly updated rates on savings accounts, checking accounts, certificates of deposit and more. Or head to MyCreditUnion.gov to locate a credit union in your area.
As you’re researching, take note of the annual percentage yield, or APY, offered on a prospective bank’s accounts, Morais says. Look into whether there are minimum balance requirements for the accounts you’re eyeing, and find out whether overdraft fees are levied, says Greg McBride, Bankrate’s chief financial analyst. You may be able to opt out of overdraft fees when using an ATM or debit card, but not when writing a check or using automatic bill payments, he warns. And be wary before signing up for an interest checking account, McBride says. Because the interest rates are often extremely low, and interest checking accounts levy high fees and minimum balance requirements, he says, “one monthly fee will wipe out years of interest.”
Do your due diligence, examining fees, balance requirements and other red flags before depositing your hard-earned cash.
Date around. Remember: You don’t have to place every account with the same financial institution. “I don’t think it’s a matter of all or nothing,” McBride says.
You might find that you like the savings account at an online bank, such as Ally, but you want to have your main checking account with a local credit union or brick-and-mortar institution. You might find it easier to keep your emergency fund stored with a separate bank to reduce temptation when you want to tap it. If it works better for you, then piece your accounts together to meet your needs, McBride says.
On the other hand, you might find it easier to link accounts and track your money if everything is in one place. It’s up to you.
[See: 11 Money Tips for Women.]
Be secure. The safety of your funds may not be top of mind — the last time this topic was especially prevalent was during the financial crisis, Crowder says — but don’t forget about it entirely.
You want to choose a financial institution that won’t endanger your money if something unexpected happens. “Ensure that you choose a Member FDIC financial institution which provides a standard insurance amount of $250,000 per depositor, per insured bank, for each account ownership category,” Morais says.
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How to Choose a Bank originally appeared on usnews.com
