Financial institutions are as unique as the people that utilize their services. What makes each institution unique are the services offered, fees for those services, banking options, interest rates, and any other factors that are important to consumers. Because institutions differ from one another so much, knowing how to isolate your preferences and needs so you can compare them to what each institution offers can help you choose who to trust your money with.
But know that choosing the right bank is not always easy. First of all, you need to figure out what your needs are. Second, you have to know exactly what to look for so you can compare banks. Third, you have to be able to scrutinize every single detail about each bank so you can weigh the pros and the cons of each against one another.
Questions to Ask Yourself
To weigh the pros and cons, you need to ask yourself questions. These questions will help you learn more about what you specifically need. Don’t worry about being too detailed with your needs. In the end, the bank that meets most of them will be the winner.
Here are the questions you need to ask yourself (and write down your answers):
1. What will you do with your bank account?
Every person has something different they want to achieve with their bank account. Some want to use it for everything. This means having both checks and a debit card attached to the account to pay bills, get gas, get groceries, and make general purchases. Then there are those people who just want to pay bills out of their account and nothing else. Then again, you may be a person who wants just a savings account so you can make occasional deposits and watch your money grow.
It is important to know what your banking behavior will be like so you can find the right bank with the right account. If you’re looking for just a savings account, you want to make sure the interest rate is one that will actually grow your money. This means comparing the interest rates of the different institutions.
2. What services are you willing to pay for?
Free services can be nice, but are they really the best? Comparing the fee schedules for different banks can tell you this. You might find that a checking account with a monthly fee gives you a little more freedom than an account that is free. For instance, you accidentally overdraw your account and need to make a deposit as soon as possible. The free account may give you no room at all to avoid the overdraft fee, but the fee account may give you until a certain time to make a deposit to avoid the fee. Fees may also be lower with the fee account.
Sometimes, it is best to see what is provided with the service for the price before taking advantage of an account just because it may be free or the cheapest.
3. How do you prefer to bank?
If you are like many people, you probably work during the time your bank is open. This means you can only take care of your business on your lunch break or during the short period they are open on Saturdays. If regular banking hours don’t work for you at all, you may want to consider a bank that gives you a lot of flexibility to take care of your affairs online through their website. Some banks even have iPhone and Android applications that enable you to take a picture of a check in order to deposit it into your account. The other option is to deposit cash, checks, or money orders through the ATM machine of a bank that allows it.
If you find a credit union meets most of your needs, you may want to consider a credit union that is a part of a CU service center network. What this means is that you can walk into another credit union within the network that is open when your credit union is closed and take care of your business there.
4. What do friends and family have to say?
Lastly, you want to ask friends and family about where they bank. Keep in mind that their needs may be different from yours, so what may work for them may not necessarily work for you. Ask them about what the bank has done for them that was great and how well the bank worked with them when there was an issue.
It’s Time to Shop Around
Now that you have gathered a lot of information, it is time to shop around. This means you are going to compare fee schedules and service terms to see which bank has the most services that meet your wants and needs. If a bank doesn’t have the information you need, simply walk in or call and ask for copies of their fee schedules and terms.
Just be sure to interact with banks that are FDIC insured. If you decide you want to do business with a credit union, it should be NCUSIF insured. What this means for you is that your money is insured up to a certain dollar amount if the financial institution would fail.
The other items to compare include:
- The convenience of the location and hours that suit your schedule
- ATM or other deposit methods if the banking hours do not work with your schedule
- Checking options and their fees (free may be best if writing a lot of checks)
- Compare loan selling points, such as no closing costs or other special offers
- To get the most interest on your cash, look for reward checking accounts and high yield savings accounts
- Online bill pay if you need it
- Online banking that is easy and convenient
- Overdraft protection if you have a tendency to lose track of spending
- An extensive ATM network if you use ATM’s often in order to reduce fees
- Fee amounts
- Everything you need now and will possibly need in the future all under one roof
When you take the time to research your needs and the different financial institutions in your community, you are increasing your chances of having a long-term relationship with the institution you choose. Those that don’t research tend to change banks a lot and this can be more of an inconvenience than doing the research in the first place. A person can change banks 3 or 4 times and still not find the perfect fit. You, on the other hand, are equipped with the knowledge you need to make an informed decision that can benefit you greatly now and in the future.