Choosing a bank is difficult. There are currently over 4,000 FDIC-insured commercial banks in the US, and with so many options, it can be hard to decide which one is right for you.
Before you fall into decision paralysis, take the time to relax, review your options, and consider which features in the bank are best for you.
Not every bank is suitable, so you need to study what is there, what you need, and even what you need. not need.
Luckily, with a little effort on your part (and this guide), you’ll be well on your way to choosing the bank that’s right for you, whether you’re looking for a credit union, a bank, or an online establishment.
Here are six steps to choosing the bank that’s right for you.
1. Ask what bank accounts are available
Not all banks are set up the same. When choosing a bank, make sure it has the right products for you. These can be checking accounts, savings accounts, and any specialized accounts you need such as a business account or an investment account.
If you’re in a CD ranked game, you’ll need to check their CDs to see if the rates match what you’re looking for. Or, if you want to have an interest-bearing checking account, you should look for a bank that serves this purpose.
If you’re also in the mortgage, car loan, or personal loan market, ask what’s available and what options or deals you might get as a new customer.
Read more: 7 Financial Accounts Everyone Should Have
2. Check their fees and interest rates
Hidden fees can take away your cold hard cash a lot.
For example, some banks charge a fee for servicing current accounts. Or, if you have ever received a late direct deposit, you may have experienced overdraft fees.
Ask what fees they charge, how much and what kinds of protections are available for overdraft situations. If you’re considering getting a credit card from a new bank, take a close look at these fees.
Interest rates should also play a key role in your choice. What are their rates compared to competitors?
Please note that online banks can often offer higher interest rates and lower fees. This is because they save on overhead by not having fixed offices and then pass those savings on to customers. They may offer a high-yield savings account that has interest rates that are higher than other banks and credit unions.
Keep both fees and interest rates in mind – for example, a single service fee can negate a large profit from a good interest rate.
3. Read the fine print when choosing a bank account
Banks are required to disclose certain information to anyone who opens an account or receives a loan product. This fine print can help you understand how due dates, late payments, and other account features can affect you.
It’s best to know yourself when it comes to that fine print. If you’ve had late payments in the past, look for a bank that has a generous grace period in the fine print so you can quickly get back on track.
Small print will also indicate promotional rates or promotional terms. These are interest rates or fee structures that usually start out very well but change over time – usually 6 to 18 months. For example, a credit card with an introductory interest rate of 0% sounds great, but you need to know when the interest rate will change to 18% so you can plan accordingly.
Read more: Best credit cards 0% per annum
4. Choose a bank that suits your lifestyle
There are several large categories of banks to consider, and some will suit you more than others.
- Little local credit unions invest in the local community often and have a regular place where you can meet someone and ask questions.
- Online banks may not have personal customer service, but they work to make up for it with transparent, commission-free accounts and high-yield savings account interest rates.
- conventional banks to have a combination of both, offering personal customer service for those who want it, but sometimes with a wider range of products.
It is important to consider how you will use this bank. For example, if you like the idea of a small credit union in your neighborhood but know you will need to deposit mobile checks for your small business, you might be better off with a larger bank that offers this service.
Balance your goals and needs and don’t be afraid to ask questions before signing up.
Read more: Credit unions vs. banks: think locally, save money?
5. Read online reviews to see what other customers are saying
Any bank or credit union can have both good and bad reviews online. The purpose of a review check is not to look at what each person says, but to see if bad reviews contain any red flags.
Poor customer service, inflexible policy enforcement, or misleading account advertising can be good reasons to look elsewhere.
Reviews offer valuable information beyond the purely positive messages of the bank’s website itself.
6. Look for additional products and services that you can use
In addition to real accounts, many banks now offer many additional options that can be very valuable – enough to make a decision to use them.
You may be interested in a variety of new or traditional products and services, including:
- Some credit unions offer a machine that sorts change and gives you cash.
- Some banks offer a perk when you sign up for a new checking account, such as $200 if you make 10 debit transactions within the first two months.
- Some banks disclose information about how they invest, in particular in ESG (environmental, social, government) organizations or socially responsible investments. If you want your money to be invested in this way, talk to banks about what their social responsibility work looks like.
- If you frequently use ATMs for cash, easy access fees matter. Make sure that there are working ATMs in places where you often visit.
- At this point, most banks and credit unions have an app, but not all are created equal. See if your potential bank’s app includes features like a mobile checking deposit, some form of bot advisor, simple tech support, and programs like Zelle that facilitate person-to-person money transfers.
Read more: Best Promotions and Offers for Checking Accounts
The best banks to look out for
It can be difficult to know where to start, but luckily we have you covered. Here are some of our favorite banks to consider when starting your search.
CIT
Some people value a high interest rate on savings accounts. If you need to keep money in a savings account sufficiently liquid, KIT Bank provides a high APY with their Savings Builder account while still offering many products such as loans, CDs, and money market accounts.
Watch out for the fine print – a saver wants to have a balance of $25,000 or at least $100 a month in deposits. But if you’re looking for a reason to start saving seriously, this might be the way to go.
Read more: CIT Savings Builder Account Review: Highly Profitable Account That Makes You Save
Ally
If you’re looking for an online bank that fits the bill – a highly functional and useful app, a high-yield savings account, and even an interest check – Ally is the way to go.
They only work online, but keep their fees low, offer great customer service, and even refund you $10 a month for ATM fees if you use an offline ATM.
Just be aware that while Ally has four credit cards available (Platinum, Everday Cash Back, Unlimited Cash Back, and Unlimited Cash Back for Nurses and Educators), the only way to get one is if you are invited to apply.
However, they do have credit facilities and Ally Invest for brokerage services.
Read more: Ally Bank Review: Competitive Rates and Products
discover
While you may know Discover from their credit cards, they also offer a full line of products as an online bank. The rates are good, but the distinguishing feature is that they have a high customer service rating.
They have also received awards for being a great place to work, which seems to indicate that the clients are very satisfied.
Read more: Discover Savings Account Review Online: Reach Your Savings Goals Faster
DKU
If you want a credit union experience but want to use it online (unless you live in Massachusetts or New Hampshire), DCU is a Money Under 30 favorite.
From all of your standard account offerings to a host of loan products, DCU offers a full range of services but also offers a credit card with no annual fee and a lower than usual annual interest rate, as well as a free check (no monthly fee) and a savings account. . with a big stake.
If you need business accounts, you can open business and savings accounts through DCU.
Read more: Top Credit Unions
Call®
If you’re just starting out or have already dealt with banking fine print, Chime will likely appeal to you. Not a bank, but a fintech app, Chime* offers Chime Visa® Debit Card and makes things very easy with no fees2 and no minimum balance.
Chime wins for creating savings habits and ease of use without the threat of fees.
* Banking services and debit cards are provided by The Bancorp Bank, NA or Stride Bank, NA, members of the FDIC, under license from Visa USA Inc. and can be used wherever Visa debit cards are accepted.
2 There is no fee for a Chime Savings Account. Chime checking accounts may be subject to cash withdrawal fees and third party fees. To open a Chime savings account, you must have a Chime checking account.
Read more: Chime Review: Control Your Money Without a Monthly Fee
bottom line
By following these simple steps, you will be able to find the best bank for your needs. And don’t forget to read the reviews before making your final decision – they can give you a good idea of what it’s like to do business with a certain bank.
Checking all your options before making a decision is the best way to make sure you get the most bang for your buck (or in this case, the most bang for your buck).
Featured image: Natalia Prakhova/Shutterstock.com