One common decision that all young adults have to make early on is what bank they should go with. In the twenty-first century, gone are the days when only one or two institutions existed in your area. With the advent of the modern, digital age, all of the institutions are so interconnected that there are perpetually one-hundred-and-one options for you to consider.
That’s what makes choosing a bank no easy task. When one has so many options, it can be easy to get confused and lost in the fees and features of each individual one. Preventing that is precisely why we’ve written this article.
When choosing a bank, it’s important to keep in mind what’s most important to you. Don’t get lost in the individual, unique selling points of each institution. Instead, make a list of what you care about the most, then set out to find the bank that meets those specific criteria for you. No more, no less.
In this article, we’ll take a look at the most common decisions someone has to make in order to shortlist the criteria that their bank has to meet.
Look at the Types of Accounts Offered
One pretty significant decision you’ll have to make has to do with the types of bank accounts that you will want to open. If you have any experience with banking, then you probably already know about savings and checkings accounts, but chances are that you haven’t heard of the other two.
A money market account tries to mix the best of both worlds of savings and checkings accounts. You can earn interest on money deposited in your money market account, but you can also write checks from that account. However, the limitation that is typically imposed is a set number of checks that you can do per month. Thus, if you open a money market account you have to choose which transactions you are going to make from that account wisely.
Another type of account is a certificate of deposit. This type of account is where you invest a certain amount of money at a set interest rate for a given amount of time. When the certificate matures, and only then, do you see the interest on the account vest for you. If you break the certificate of deposit before it comes to term, then you will lose out on those capital gains.
Consider which of the four above bank accounts you will most likely want to use. Ensure that any institution you choose to bank with offers all of those accounts that you’ll need.
Check Out the Fee Schedule
Different banks have different types of fee schedules. Some banks, like credit unions, will often have very low fees if any at all. Some may only impose overdraft fees and have very low minimums. This is often the case with any bank that supports a significant student population.
However, those banks that have smaller fee schedules often have disadvantages bundled in with them. They may have lower coverage, fewer ATMs around, no branches in other states, a lack of online banking, et cetera. So don’t just look only at the fee schedule; understand how much you’re willing to pay, but also consider how much bang you’re getting for your buck.
Think ATM Coverage
Any kind of credit union, in particular, will have lower ATM coverage than other national banks. Although you’ll still be able to use your card to withdraw cash, you’ll often pay much higher fees than if you banked with a more international/national bank.
Think of how much you’ll need to use an ATM and if you’ll be using ATMs out of state fairly frequently. If the answer to that is high usage, then you might want to consider going with a bank that has more national-level support.
Online Banking is Crucial
In the twenty-first century, online banking is a must. There’s simply no reason to go without it, given that so many institutions now support online banking.
One of the most attractive benefits of online banking is Online BillPay, wherein you can automatically schedule your bills to be paid. This could include bills like your Internet bill, utilities, car payment, and the like. This will ensure that you never forget to pay a bill and never have to be subject to something so unnecessary as a late fee or a credit score hit.
Look Up Customer Service Reviews
When dealing with a bank, it’s always refreshing to be in the hands of excellent customer service that works hard to resolve your issue. Unfortunately, not all banks have great customer service.
You want to go with a bank that offers great coverage (must have at least one 24 hour number that you can call, should things go wrong outside of business hours), multi-channel support (phone, email, and maybe even live chat), and a ver high standard of customer service. Look up online reviews before committing to a bank to check out what other customers have to say about their service.
Deposit Insurance is a Must
Last but not least, think about deposit insurance. These days, most banks will ensure all accounts up to $250,000, should the bank fail and be unable to pay your balance back to you.
Thus, there’s no reason to go with a bank that doesn’t offer this deposit insurance. And if you’re thinking that your savings will exceed the $250,000 limit, search for the best private banks that offer an even higher savings limit. Although you probably won’t think much of it right now, should anything like a recession hit and the bank go under, you’ll be thanking your lucky stars if you have deposit insurance and kicking yourself if you don’t.
Choosing a Bank, Made Simple
Choosing a bank doesn’t have to be a hard decision. Figure out what you need from your bank, and then make sure to only choose an institution that provides all you need. With as many options on the market as there are, there’s no reason to settle for a sub-par bank!
For more financial advice, be sure to check out the rest of the articles on this website!