6 Things to Consider When Choosing a Bank or Credit Union
What was the first financial decision you ever made?
It likely took place before your first job, before you started getting a weekly allowance, or even as far back to when your annual income consisted of Tooth Fairy money, and lucky pennies. The first financial decision you ever made, was probably where to keep your money.
When you first made that decision, piggy banks, sock drawers and treasure boxes all seemed like justifiable options. As it turns out, they aren’t nearly as secret or secure as you might have hoped. Putting your money in a bank account is the best the solution, but in order to do that, you first need to choose a financial institution.
Whether you’re new to banking or feel the need to make a change, there are a lot of factors to consider when deciding which financial institute to go with. So what should one look for? Choosing the right bank or credit union starts with knowing your bank usage and individual preferences.
Here are six things to consider when choosing a financial institution:
The whole point of putting your money in the bank is to keep it safe, right? If you’re worried about what could happen to your assets if the bank were to go belly-up, you need to choose an institute that is protected by the government. Make sure the bank or credit union you choose is insured by the Federal Deposit Insurance Corporation (FDIC) for banks, or the National Credit Union Association (NCUA) for credit unions. Do not use a bank or credit union that does not have such protections as you want to make sure your money is secure.
Knowing your money is safe in your bank account doesn’t count for much if you have trouble accessing it. Making sure your financial institute offers convenient options is important, because lets be real, time is money. So whether it be accessing your account through online banking, a mobile banking app, or banking at a physical location, you want to make sure that whichever way you prefer to do your banking, it’s convenient for you.
Interest rates work both ways: the rates you receive on money deposited at a bank or credit union, and rates you pay when borrowing via a credit card or loan. Ideally you want to find an account that pays higher-than-average interest on your deposit and charges lower-than-average interest on your debts. Credit unions, as a not-for-profit, member-owned institutions, tend to have higher APYs on deposit accounts and lower fees than traditional banks.
Before you open any account you should ask to see a complete fee schedule. Depending on the institution, the types of fees you can expect may include: an account opening fee, check writing fee, monthly maintenance fees, minimum balance fees, online or mobile banking fees, bill payment fees, transfer fees, overdraft fees, etc. The fees with banking can add up quick so make sure you are aware of any fees associated to opening an account.
According to Pew Research, nearly nine-in-ten Americans today are online, and 77% own a smartphone. With the increasing number of connected users, online banking features can be crucial. Your financial institute should provide innovative technology, including the latest trends, such as mobile apps, business online and mobile banking services. Good technology can help you stay on track with your money. So determine the must-have technology features you would use, which can help narrow down the list of suitable institutions.
When you have a problem or question, the last thing you want is to sit on hold, or get a customer service representative who is unhelpful or rude. Ask around to find out what banks or credit unions make your friends and family happy.
At the end of the day, choosing a financial institution is a personal decision that has a big influence on how you manage your money and time. If you make the effort to ask questions and compare services, you’ll find the best home for your finances.
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