How to Choose a Bank

Banks help consumers store money, track expenses and build wealth. These financial institutions also offer Federal Deposit Insurance Corp. (FDIC) insurance that protects the first $250,000 in your bank account. Consumers can choose from many banks, and financial institutions have to provide more than the basics to keep people engaged. This guide will walk you through some of the things to consider when choosing the right bank for your finances.

How to Pick a Bank

You can choose from thousands of banks. These factors can help you choose the optimal bank for your needs.

Assess Your Banking Needs

Consumers should consider what they need from a banking experience. Some people enjoy visiting banks in person, while others are happy to embrace an online banking experience for higher savings rates. Some people may rely on good overdraft protection to avoid extra fees. These people may have low checking account balances that wouldn’t fare well with a gas hold, which places an authorization hold on your account until the transaction clears.

Consider Account Fees and Charges

Banks charge fees for various actions. Excessive fees can make a bank less desirable, and consumers should see how banks charge their customers. While many financial institutions brag about not having any hidden fees, they have many fees. Not everyone looks at a bank’s publicly listed fees. Comparing fees and charges can help you save money on your banking experience. 

These are some common fees to look for:

• Monthly maintenance fees
• ATM charges
• Overdraft fees
• Wire transfer fees
• Insufficient funds fees

Evaluate Online and Mobile Banking Services

Online and mobile banking services help you transfer funds between bank accounts and pay credit card debt online. Online flexibility is a significant factor to consider. A clunky website or a mobile app that doesn’t always load properly will make your money less accessible. 

Some banks have mobile banking features that are more convenient for customers. Mobile check deposits, bill payments and account alerts are useful features that can help you save time and money.

Weigh Branch Accessibility and Location

Consumers looking for mobile banks do not have to worry about this feature as much. If the website works and the mobile app has a good user experience, these consumers are ready to go. But some people want an in-person banking experience and should consider the proximity of local branches. If the closest branch is more than an hour away, you may want to consider another bank.

Consider Customer Service and Support

When you have a question or need an issue resolved, you will have to contact customer support. Checking online reviews can give you a gauge of the bank’s customer service. While every bank will tout its best-in-class customer support, reviews from past and current customers tell the true story. 

ATM Network and Fee Reimbursement

Some banks have vast ATM networks that minimize the likelihood of incurring out-of-network fees. If you come across these fees, some banks will reimburse you. Each bank has a different approach to fee reimbursements and varying ATM network sizes. Consumers who withdraw cash from ATMs often should carefully consider how each bank handles ATM network fees.

Bank Account Features to Consider

Banks are far more than places to store money. The best bank accounts have many features that enhance the experience and can help you better manage your money. 

Analyzing Account Types

The best banks offer various types of accounts. These financial institutions let you create checking, savings, money market and certificate of deposit (CD) accounts. Checking accounts are for your everyday expenses, while savings accounts are your nest egg for emergency expenses.

Money market accounts and certificates of deposit can generate higher returns than traditional savings accounts. You can access funds from a money market account at any time, but you usually have to wait until a CD’s term ends to access funds.

Special Account Features and Perks

Some banks offer special features and incentives to encourage consumers to use their services. You may receive cashback rewards, bonus offers if you deposit enough cash within the first 90 days and referral programs. These additional benefits give consumers more capabilities, but it is important to assess how these extra features align with your financial goals. 

Assess Minimum Balance Requirements

Some banks have minimum balance requirements to open an account, especially for CDs and money market accounts. Lower balance requirements make it easier to get started, and more generous minimum balance requirements can help you avoid fees. Don’t do business with a bank that has stringent requirements that increase the likelihood of incurring fees.

Overdraft Protection Options

Overdraft protection can minimize overdraft fees. If you overdraw money from your checking account, this protection can use funds from your savings account to cover the purchase. Some banks also spot you temporary cash for gas holds and wait for your balance to get overdrawn by $100 before charging overdraft fees.

Any overdraft protection can save you a lot of money. Each time you overdraw your account, you can incur an overdraft fee, which usually costs $30 to $35. Many banks charge four to six overdraft fees per day if you overdraw your account’s balance that many times. Some banks set their maximum limit to 12 overdraft fees per day.

These costs can add up, and overdraft protection can keep you safe. Look for a bank that gives you extra coverage and minimizes the likelihood of incurring overdraft fees.

Account Security Measures

Cyber hackers are getting smarter, but so are cybersecurity solutions. You should see how your bank addresses security and what measures it has in place. Two-factor authentication and account monitoring can go a long way toward keeping your information safe. Account security measures give you the confidence that you are building your finances on a firm foundation instead of on sand.

Enhancing Your Banking Experience

Exploring several bank accounts can help you find the right banking solution for your needs. Consumers can choose from thousands of banks. Some of these financial institutions have many physical branches, while others operate entirely online. Knowing what you want will improve your chances of finding a bank that fits your needs.

Frequently Asked Questions