Smart consumers know that banks are not one-size-fits-all. The financial institution that carries your mortgage isn’t necessarily the best choice when you’re looking to open a checking account. That being said, the first step in finding the right bank is to define the reason for your search and then using that information to compare institutions to find the best fit.
Evaluating the competition is no longer the drudgery it once was – plodding from bank to bank to get their rates and terms has been replaced by the ease of the Internet.
Comparing is now as simple as perusing each company’s website, collecting the data and doing the math. To even simplify it more, there are online calculators that can help you see the bigger picture and the total cost of doing business with each by calculating the terms and fees. Be sure to limit your search to insured institutions that can keep your deposits safe.
Banks should be FDIC insured and credit unions should be NCUSIF insured.
Conveniences to Consider
Most banks offer their customers the advantage of online banking. But if you are hesitant about handling your finances over the web, an important consideration would be branch location. Not that this should be at the top of your list when it comes to choosing a bank, but having to drive out of your way on a regular basis certainly is an inconvenience. Also, be sure the bank hours coincide with your personal schedule – are there weekend hours, etc.
Some major banks have opened branch offices in supermarkets that may work well, if you generally shop that particular market. Community banks and credit unions may offer a more personal relationship and benefit the community, as well. Look for the availability of fee-free ATMs that provide 24/7 access to your accounts.
Pay for only those convenience that matter. Be sure to compare them before choosing a bank and don’t allow the bank to talk you into a service that you haven’t examined in full. Never agree at that moment; take the relevant paperwork home to decide. A few extra bucks here and there really add up.
Rates, Rates, Rates
The only cost-saving strategy in the financial world is to avoid rates and fees. While this may be impossible in every circumstance, a wise consumer will compare the services and fees of the competition before choosing.
Even a half of a percentage point can mean big money, especially if you’re looking to get a mortgage. And over time, even a small investment will take a hit from what may seem to be a dismal amount (.05%).
Checking Accounts and Daily Living
If you’re looking for debit and check writing privileges to help manage daily living expenses, your focus should be on the fees and interest rate.
Beware of the hype for free checking; there may be a larger minimum balance required and high fees when you go below it.
Ask for Advice
Perhaps the easiest way to choose a bank is by asking family, friends and coworkers about their personal experiences. First hand opinions are some of the best sources for weeding out the institutions that have poor customer service, rates and fees. Check out blogs on finance to see what’s being posted and ask questions from those who are directly involved in the industry.
When searching online, keep in mind that negative experiences will be more common than positive ones. Upset people are motivated by emotion to spread the word; while content customers may take their experiences for granted.
One thought bears repeating. Don’t look to one bank to provide all your financial needs. Shop around for that car loan, mortgage or investment opportunity. Make your money work for you by finding the best institutions for each particular circumstance.
About The Author: Noreen Ruth writes for ASAP credit card blog and several other popular finance websites. She is interested in educating consumers about using credit responsibly and about legislative action that will affect their ability to borrow the money they need. She has contributed hundreds of articles to various online sites that provide content to educate consumers on the best credit cards offers, debt relief services, loans and other finance related topics.