Banking is something that everyone who earns a paycheck has to consider. While there may be some that don’t use a bank, it is uncommon. With so many people keeping their money in banks, new banking institutions, especially online, have increased. This leaves people who need a bank account or are unhappy with their current banking institution with a wide variety of choices.
Sometimes, like at a restaurant that has far too many choices on the menu, having such a wide variety of choices in banking institutions makes it difficult to choose one that’s right for you. There are several things to consider when choosing your bank. Here are six tips to help you choose a bank that fits your banking needs.
Account Type
The first thing you need to consider before choosing a bank is what type of account you need. First, you need to decide whether you need one account or multiple accounts. Many people will have both a checking and savings account in the same banking institution, often linking them together. However, today, people are more concerned with bank accounts that help them earn money or invest in their future savings.
Savings accounts at most banking institutions do not have a very high yielding interest rate. However, online banks have generally been offering higher-yielding interest rates on savings accounts or checking accounts. They can do this because they have less or nonexistent fees. Many banks also offer cashback bank accounts to earn money every time you use your debit card or checking account. Also, many checking accounts offer the ability to put away spare change. The idea is that it is rounded to the nearest dollar, and that difference will be put into savings.
Fees and Balances
An important thing to consider when choosing a banking institution is what kinds of fees and balances they have or require. Many banks will charge exorbitant fees for overdrafts and some banking transactions. Some banks require minimum deposits or balances, or they will charge additional fees. It is important when you are choosing a banking institution that you look into what their fees and policies are on balances. These fees could end up costing you a lot of money. So look for a banking institution that has minimal fees and balance requirements.
Accessibility
When opening a bank account and choosing a banking institution, a crucial thing to consider is accessibility to the accounts. You want to consider whether your banking institution has multiple ATM locations and multiple branches for cash withdrawal and in-person banking needs. While many will do most of their banking online in recent surveys, many people still prefer to do some of their banking in person.
Online banking has taken the financial industry by storm. It has even established banks that are 100% online. Many of these banks appeal to customers because they have lower fees due to low overhead and offer higher-yielding savings accounts. Some still prefer brick-and-mortar traditional banking more prefer to complete all banking transactions through mobile devices and online. When considering what bank to put your money into, accessibility needs to be a high priority consideration.
Credit Unions
Many people who are considering opening a new bank account or switching banks disregard credit unions. While credit unions usually have some membership requirement, they are much easier today to qualify for in the used to be. If you can get a bank account at a credit union, it is highly recommended.
There are many advantages to banking with a credit union. They often have lower fees and higher interest rates on savings accounts. They also have membership benefits not offered at other banking institutions. Because they value their members, they will often work with members who may have faulty credit. The only disadvantage is that most credit unions are local and don’t have ATMs. But to make up for this, many credit unions reimburse and waive all ATM fees.
Online Banking
While almost every banking institution offers online versions of banking and banking through your devices, there is also a surge of banks that are contained 100% online. When speaking of banks that are centralized only to the online environment, there are many advantages to using these for your bank account. Online banking institutions generally have lower fees and, in some cases, no fees. They also offer higher-yielding interest rates on savings accounts. They can do this because they have no overhead and can pass those savings to their customers.
It should be noted that there is no possible way to deposit cash since there is no brick-and-mortar location or branch. To combat this single disadvantage, you can use your cash to purchase gift cards through major credit card companies that will work like a debit or credit card for purchases.
Terms and Conditions
The final thing you want to consider when choosing your banking institution is the terms and conditions of the bank your considering. It is imperative that you need every line of the bank’s terms and conditions before depositing money into it. Many banking institutions have hidden fees and requirements that could end up costing you money. Though we live in a society where we often skip the terms and conditions, it is important when choosing a bank that you read them. You may find there are some deal breakers hidden within the words.
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