7 Ways to Pick the Bank That's Right for You
With so many options, picking the right bank isn't always easy, leaving some people to pick a bank at random without giving much consideration to whether the institution meets their banking needs. (Personally, I chose Bank of America because of its abundance of locations across the country; I was tired of paying all those ATM fees from other banks while I was traveling). But while this a quick way to pick a bank, it doesn't guarantee the best banking experience. (See also: 9 Good Reasons to Choose a Credit Union Instead of a Bank)
1. How Do You Prefer to Bank?
Some people prefer going to an actual branch and speaking with a banker face-to-face, so they need a brick-and-mortar location. And if you travel a lot for either work or pleasure, you might need a big bank with locations in most of the country. When I first moved to New York City, I had to switch banks specifically for this reason. The bank I was with had very few branches in Manhattan, and I would have to take a 15-minute subway ride to deposit a $25 check.
On the other hand, if you're primarily banking within your community, and you prefer personable service and a hometown feel, a regional or community bank might provide a better banking experience.
Then again, maybe you can't remember the last time you stepped foot in a bank branch. Or perhaps you conduct most of your bank transactions electronically — thank goodness for mobile deposit, amiright? — so an online checking or savings might be right up your alley.
2. Check for FDIC Backing
Even a big bank can shut its doors. Remember 2008? No matter the type of bank you choose, you need to be confident that your money is safe. Therefore, only bank with institutions that are insured by the FDIC. Your funds are protected up to $250,000 per account, so you know your cash is safe if the bank goes under.
3. What Are the Hours and Locations?
Choose a bank with locations and hours that work with your banking schedule and location, since you probably don't have time to drive 10 or 15 minutes out the way to find a branch. Also, factor in a bank's lobby and drive-up teller hours. When are you most likely to visit branches? If you prefer visiting a branch before or after work, a bank that opens before 9 a.m. and remains open until 6 p.m. might be a better fit. Or if you conduct most of your transactions on the weekends, a bank that offers Saturday or Sunday hours may be a better option.
4. What Are the Fees and Interest Rates?
If you're switching banks because you're fed up with high fees and low rates, you need to be more selective this time around. Besides, if you're looking to grow your money and reach a financial goal, the last thing you need are fees eating away at your balance. Speak with a banker or visit the bank's website for information on fees and rates.
Is there a monthly maintenance fee for checking and savings account? If so, is there a way to avoid this maintenance fee? Does the bank offer free overdraft protection? What's the returned check fee? What type of rates can you anticipate for a checking or savings?
5. Does the Bank Offer a Variety of Investment Options?
Regular savings accounts don't earn much interest, but with a certificate of deposit, a money market account, or interest checking, you'll usually get more bang for your buck. Does the bank offer these products?
Some small banks only have one type of checking or regular savings, whereas other banks offer a variety of accounts to accommodate different customer needs. Some banks offer accounts specifically for students or senior citizens. You should thus consider your banking needs and determine whether your chosen bank offers adequate options. The goal is finding a bank with accounts that match your savings or checking needs.
6. Do You Need Other Financial Products?
You may prefer using your bank for all your financial needs. So, when choosing a bank, make sure you inquire about other products. If you're planning on getting a mortgage or auto loan in the near future, you might choose a bank that offers these products as well. As an existing account holder, you might be eligible for better rates on loans and credit cards.
7. What Services Are Important to You?
Make a list of must-have banking services. Big banks offer a massive selection of services, such as online banking, bill pay, wire transfers, and direct deposit. These institutions usually have the resources to provide the most innovative products. But if you're working with a community or a regional bank, services might be limited. Visit the bank's website to make sure the institution offers the services you use.
How did you choose your bank? Did any other these suggestions factor in? Let me know in the comments below.
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