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Choosing a bank isn't something that many people take seriously. They simply need a place to store their cash and to get it when they want it quickly. In reality, some people just continue with the bank that their parents used (or even grandparents). Does it matter? All banks provide similar services, so it shouldn't matter which one you choose, right?
Hold on! Not all banks are the same. It's time to do your research to find the best one for you. Yes, we know, it's not the most pleasurable thing in the world to do. However, it is the only way to avoid paying excessive fees, taxes, and other expenses that take funds from your wallet.
So, how do you go about finding a bank? Toss a coin? Rock-Paper-Scissors? You must be more careful than that. Selecting a bank may not be the most important decision you make in your life. However, choosing the ideal bank for your needs might make it easier to manage your accounts – and it may even save you money.
Here are 5 Pointers to Help you Find a Suitable Match.
1. Select a Bank Type
When it pertains to the actual storage of your money, you have three fundamental options:
Traditional Bank - These can be seen on the corners of every major city and small town in America. With a traditional bank, you can select between a large national bank and a smaller community bank.
Honestly, unless you prefer being regarded as a nameless, anonymous account number, there is no benefit to large name-brand banks. A smaller community bank, on the other hand, will frequently provide excellent customer service and allow you to get to know the individuals who handle your money.
Online Bank- Online banks were rare 20 years ago, but their demand has grown with time, and they now compete directly with traditional banks. Because Internet banks have fewer or no physical branches, their overhead expenses are significantly lower than those of traditional banks, and their fees are often significantly lower as well.
Furthermore, the absence of physical branches results in greater savings and benefits for customers. However, this implies that there isn't a lot of face-to-face social interaction.
Customer service with online banking is typically handled solely over the phone, over email, or via live chat, free of the constraints of physical locations and basic banking hours. Many traditional banks and credit unions now include similar customer service features.
Credit Unions- Credit unions are sometimes misunderstood as an alternative to traditional and online banks, but they have benefits that make them a viable option.
To begin, credit unions are nonprofit financial cooperatives. Because they are member-owned, profits are distributed to members in the form of cheaper fees and better interest rates on deposit accounts. In contrast, publicly listed traditional banks must satisfy revenue targets and are accountable to shareholders.
Second, the majority of credit unions have real relationships with their local people.
Credit unions, on the other hand, can have quite strict regulations for members to access the service, and not all of them provide amenities such as online banking. This may make you a poor candidate for a bank account that you need to use and work frequently.
2. Check out Interest Rates and Fees
The fees and interest rates offered by a bank are the next factors to consider when deciding where to bank. The majority of people will have two basic accounts: checking and savings. The features you require for each type of account will change, and it is fairly common to have various accounts at multiple institutions.
Banks and credit unions typically post their rates online. Because they do not bear the costs of maintaining a brick-and-mortar bank in every town, online banks frequently offer higher rates. We're not talking about enormous numbers here, but you still need to do your homework. Begin by eliminating those with lower interest rates.
3. Determine the Number of ATMs and Branches
Many banks charge you a fee if you use an ATM from another bank. If you enjoy using your ATM to get cash for your wallet system, be sure you have a reliable network that does not charge you fees. If your bank or credit union has multiple locations, you have a better chance of finding handy, fee-free ATMs nearby.
4. Check to See if it Offers Mobile or Online Banking
When it comes to convenience, having a user-friendly website and mobile banking app that perform together is a real game-changer. You'll be able to transfer money, examine your accounts, make payments, and perform mobile deposits with a decent online bank. Some websites and apps even include an ATM locator and text warnings when your balance falls below a certain threshold.
5. Check the Bank's Security
In today's scammer world, you can never be too cautious when it comes to securing your personal and financial information. If a middle-schooler hacker can get into your bank, none of the other characteristics on this list will matter. If a bank or credit union has poor security, consider it a red sign.
You should also ensure that your money is protected. The Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) insures the majority of banks and credit unions. Both will provide coverage for accounts up to $250,000. That implies your money will be safe even if the bank fails. Bottom line: Don't give your money to a bank or credit union that isn't insured.
The ideal strategy for choosing a bank may be summed up by a few key functions. A good bank does the following:
So build a list, rank some possibilities against all of these criteria, and then see which credit union or bank emerges as the winner. Remember, you can always change your mind or start a second account if your initial decision does not work out.
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