Choosing a bank is one of the most important financial decisions one will ever make. Different banks avail different financial opportunities to their customers. For instance, one bank can offer free checks, high-interest savings accounts, low maintenance fees, etc. It is therefore wise that one considers their current financial situation as well as future needs when deciding which bank is right for them.
Experts advise that you bank with an institution that offers the products, account types as well as services you want. You can even have more than one bank as this will help manage your money more flexibly while still enjoying a wide array of features and services.
So how do you choose the right bank account? Here are some things that you should consider.
Bank Type
There are three types of banking institutions available: traditional, online and credit union. Traditional banks are brick and mortar businesses. In most cases, they’re large banks that offer various services via several branches as well as ATM locations. However, there are also small banks that only have one branch. Traditional banks are great for people who like banking in person or want assistance with queries from time to time.
Online banks offer the same services as traditional ones, only that they’re online and don’t have branches. Since they have less overhead, these institutions offer competitive fees and interest rates. Well, online attendants who provide customer support are always available. However, you can’t walk into the bank and get help if you have a problem.
Credit unions are non-profit organizations that offer financial products and services to their members. These are member-owned, meaning that all profits go back to members. But, to be part of a credit union, a member must meet certain criteria based on their place of work, residence as well as the organizations they belong to.
Products and Services Offered
Well, if you just need a checking account for paying your bills or a savings account for saving for a rainy day, then this step isn’t that crucial as all banks offer this. However, if you need more services like loans, then you should look for a bank that offers such products. Well, most banks and credit unions offer loans to their members. Plus, they may have services that can help individuals manage transactions like an automatic pay bill, certified checks, etc.
But, someone who needs services like financial planning or wealth management should determine if they’re offered. And because it’s difficult finding a bank that offers all the services you need, one is advised to bank with multiple institutions.
Fees Charged
Banks usually charge fees for the services they offer. The amount differs depending on the bank. But, many institutions will often lower or waive their fees for clients who meet certain criteria like setting up direct deposits. You should determine all the fees charged by a bank before opening an account. Most banks charged overdraft, cashier’s check, wire transfers, returned checks, certified checks, and monthly maintenance fees.
Interest Rates
This is essential especially if you’re planning to apply for a loan. Ensure that you chose a financial institution that charges low-interest rates on loans and high rates on savings. This way you can comfortably pay back a loan and still deposit some money into your savings account. However, different banks charge varying rates. Therefore, make sure that you shop around for one that offers the best rates.
Online and Mobile Banking
Some banks offer online and mobile banking to clients who don’t love visiting the local branches. If this service is essential for you, then go with an institution that offers it. Have a look at their online/mobile banking systems and any apps they have that could improve your banking experience. Again, it’s also wise that you choose an institution that has two-factor authentication as this provides an extra layer of security to your banking transactions.
Final Thoughts
Well, there are many factors to consider when choosing the right bank for you. Therefore, one should determine what matters to them most and look for institutions that provide that.