A recent survey by RLC, USA shows that the top 10 reasons consumers choose banks. Here are the top 5: location, previous relationship with the bank, reputation of the bank, easy application process, and recommendations from friend. Your money is too important to make a haphazard decision about your bank, so as you wonder how to choose a bank, here are some other things you should consider.
Is your money secure?
If the bank fails, you want to be sure you’ll get your money back. The FDIC (Federal Deposit Insurance Corporation) insures accounts at many banks for up to $250,000. Credit unions aren’t covered by the FDIC, but by a similar organization, the National Credit Union Association. Before you decide on a bank, make sure it’s covered by one of those two agencies. Otherwise, you risk losing your money if the bank files bankruptcy.
How much does the account cost?
There are many banks that offer free bank accounts, but will eat you alive with overdraft, stop-payment, and returned-deposit fees. Don’t be surprised by fees to talk to a bank teller, to check your balance, or to get a money-order or cashier’s check. You should also be aware of ATM fees that may be charged when you use another bank’s ATMs. Look for the bank that’s going to charge you the least amount of money for the services you use.
Online bill paying options?
Long gone are the days when you sat down with a checkbook, a stack of envelopes, and a book of stamps and paid your bills. These days it’s a lot faster, cheaper, and more convenient to pay your bills online. As you shop for a bank, check the availability and cost of online bill paying. There are quite a few banks that offer this benefit for free so if you have to pay, make sure the bank makes up for the cost with other perks.
Is the bank accessible enough to meet your needs?
Online banks have increased in popularity, but if you need a bank you can walk into, an online bank won’t serve your purposes. Think about how often you’ll actually need to visit the bank and evaluate each bank based on that need. If you have a busy work schedule that won’t allow you to visit the bank during normal business hours, look for a bank with late evening and weekend hours. Also consider the bank’s physical location in relation to where you live or work. If you’re going to visit the bank over the weekend, don’t pick a bank that’s near your job (if your job is on the other side of town).
Are there minimum balance or minimum deposit requirements?
Some banks require you to deposit or maintain a certain account balance, or both, to bank with them. Whether you choose a bank like this depends on whether you can afford to maintain the minimum balance. You can often open an account without having the minimum balance, but you’ll be charged a fee each period, monthly or quarterly depending on the bank, that your balance falls below the minimum.
Take your time choosing a bank and ask your friends and family for recommendations. Some banks charge a fee for closing your account within a certain period of time, so try to get it right the first time.