One of the best decisions you can make is choosing the right financial institution that will manage your money. But with the number of banks and financial institutions out there, it can be a difficult decision. This is a s a result of different financial institutions offering different levels of products and services which are tailored to meet customer expectations. This is why they all charge different fees which you’ll likely pay different amounts of interest on your money.
With the way technology is evolving every day, the competition among financial institutions is becoming increasingly high. This is why when it comes to choosing the best bank to manage your money can be confusing.
As time goes on, there is every possibility of the bank changing over time. As a result of this, we see a lot of people jumping from one bank to the other which makes them feel like they’re on a loop or even poor managing their income.
As your financial investment and goals change with time, a time will come when you will need to have multiple accounts in other to manage your money properly. One of the interesting things about the banking sector is the fact that there are no limitations to the number of accounts you can have. This means that you can freely swap from one account to the other without any problem. It is your money, your freedom.
Diversifying bank accounts is a great way for managing finance especially if you’re into business and there are massive inflows. This will allow you to get the most out of your money.
In this article, I’m going to discuss the important factors you need to consider or put at the back of your mind when it comes to choosing a bank for savings and checking accounts. This will cover important things like the type of bank, the rates and fees it charges, and the extra features it offers.
Without wasting much time, let us dive into the things you need to consider when choosing a bank.
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Things To Consider When Choosing A Bank
The Type Of Bank
When it comes to choosing a bank, the type of bank is one of the most fundamental factors which you need to consider before any other thing.
In the banking sector, there are three distinct types of financial institutions which you can consider looking into. These banks offer different types of services which all come with their own pros and cons.
The Traditional Bank
When people hear the word “Bank”, the first thing that comes to their mind is the traditional bank. These banks are known to offer various services to their customers largely through a network of brick-and-mortar offices where customers can walk in to perform various transactions or even request an ATM card which they can use on various ATM machines that are strategically placed in various locations in and outside of the vicinity of the bank.
With the rapid change and advancement in technology, the banks are beginning to offer other advanced services such as the online banking service that allows customers to perform self transaction from the comfort of their homes such as paying bills or making transfers and deposits.
Despite how advanced technology has taken the banking sector, there are 101 reasons why you need to choose a traditional bank over online competitors or credit unions. These financial institutions have been around for a very long time.
The traditional bank of today has strategically made its services easily accessible both online and at the branch. If for any reason, you’re facing any challenges, you can contact customer service on phone or walk into the bank to talk to someone about your challenges.
All of these I have mentioned are some of the reasons why traditional banks are the most sort after banks. That doesn’t mean you can not take advantage of other banks. They all come with amazing benefits which you can enjoy as a customer of the bank.
The most important thing you need to consider when choosing a bank in the united state is to make sure that you select a bank that is insured by the Federal Deposit Insurance Corporation (FDIC), which covers $250,000 for each depositor, per account category.
The Online Bank
Some decades ago, online banks would have sounded like a mare dream when being spoken of.
20 years ago, this form of banking was relatively rare and uncommon, but today it has become popular and widely known as a great bank or banking system.
Most of this bank is not having a physical branches that customers can walk into as almost everything is done online from the comfort zone of the customer. Their overhead cost is way lower than those of traditional banks. This also means that their fees are typically far lower, too.
While most of these online banks are working their way to compete with traditional banks, they also face so many challenges too. One of those challenges is handling customer service. With an increasing number of customers using this type of banking system, attending to them in large numbers can be frustrating at times. This is why most of these online banks invest more in hiring remote customer care assistants to help keep up with customer demands.
The best online banks now offer extensive customer support options, but you still won’t be able to walk into a branch to talk to a bank employee in person.
Seeing how fast some of these online banks are growing, most traditional banks are beginning to start introducing other advance digital banking services and tools which one can find on most online banks. This means that you can possibly enjoy everything you can get from an online bank while using some traditional banks.
Credit Unions
With the online banks and traditional banks out there, one can say that the credit union is not to be compared with all those banks. But the truth still remains that the credit union has some advantage over those banks which makes it also a good choice when it comes to banking.
Credit unions are financial institutions which are owned by the members. Even though they are regarded as a not-for-profit financial cooperative, the members of the cooperative still enjoy the profit which is returned to them via lower fees and higher interest rates on deposit accounts.
One of the interesting things about credit unions is the genuine relationships they maintain with their local communities.
If for any reason, you’re looking for a bank that gives back to the community, then picking a credit union will be your best choice.
However, credit unions can have fairly stringent rules for members to access services, and not all of them offer features like online banking. This may make one a less-than-optimal choice for a checking account that you need to access and work with on a regular basis.
If you opt to bank with a credit union, make sure that it has been insured by the National Credit Union Administration (NCUA). Like the FDIC, it ensures up to $250,000 for each depositor annually.
Interest Rate And Service Fees
This is also another major factor you need to consider while choosing a bank. Understanding and knowing the fees and the interest rate of the bank you wish to bank with will help you know if the financial institution is for you or not.
When operating with a financial institution, you must own a particular type of account. This account can be a savings or a checking account and they all come with different features and fees.
Some of the banks we have today will charge you monthly in other to maintain a checking account, and they all vary depending on the bank.
A bank may waive or lower some of these fees if you meet certain criteria, such as maintaining a minimum balance requirement or setting up direct deposit for your paychecks.
To keep these fees to a minimum, it’s important to understand what a bank will actually charge you for using a checking account.
To ask the right question about fees and interest, I will advise you to as the right questions such as :
- Monthly maintenance fees
- Overdraft fees
- Out-of-network ATM fees
- Stop payment fees
- Statement fees
- Wire transfer fees
- Cashier’s check fees
- Certified check fees
- Returned check fees
When you look at everything we made mentioned of, you’ll realize that fees are by far the largest distinguishing factor among checking accounts. All else being equal, you should choose the checking account with the lowest charges.
The Interest Rate Of The Bank
The last thing I will advise you to consider when choosing a bank is the interest rate. This is very important but only a few pay attention to that.
Before I conclude the article. There are other features you can look out for when choosing a bank. These are the type of institution you choose and the amount it will cost you in fees or lost interest—which are the most fundamental aspects of choosing a bank.
Some banks offer a range of services, discounts, and other features that will entice customers to use their services. When the bank gives quality services on online and app-based banking, local branch and accessible ATMs, and security, then that bank should be something you should check out.
One other thing you need to know about which bank is best for you is when the bank does the following for you:
• Gives you easy access to your money
• Doesn’t charge exorbitant fees
• Offers a good interest rate on your savings
• Has great online and app-based banking services
• Provides excellent customer service
• Is trustworthy with your money
Conclusion/ Final Verdict
With that all said, we’ve come to the end of the article. I hope you find this article helpful, educative, and informative. If you do find it helpful, don’t forget to share. This will encourage us to write more informative articles like this.
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