10 Key Things to Look for When Choosing a New Bank
Americans often feel overwhelmed when they think about switching banks. In fact, the average U.S. adult will use the same primary checking account for over 14 years. However, the right bank can do a lot to improve your current financial stability and your future retirement savings.
10 Critical Factors to Consider When Choosing a Bank
If you’ve kept the same bank or account for several years, you may not know what to look for when you plan to switch.
Here are 10 things to know when choosing a new banking institution.
1. Common Account Options
All banks will have a checking or savings account, but it’s harder to find an institution that offers a certificate of deposit (CD) or a money market account. Regardless of what type of account you want to open, you have to make sure that you benefit from keeping your money at the bank.
2. Stock or Trading Accounts
There are many reasons why learning how to trade is important, but you can only get the most out of trading if your bank offers a trading account. If you’re interested in building wealth, find a bank that makes it easy for you to make a stock market investment online or through an app.
3. Additional Bank Services
Some people like to handle all of their finances with the same company. If you want to do more than store your money at a bank, look at the other financial products and services they offer, such as mortgages, private student loans, personal loans, credit cards, and financial planning.
4. Varying Interest Rates
When opening a new bank account online, you need to pay close attention to its interest rate. That includes the amount you’ll earn (i.e., savings accounts) and what you’ll pay (i.e., car loans), as you’ll want to keep as much of your cash as possible. Check if these rates change regularly.
5. Low-Fee Banking Institutions
The last thing you want to do is lose money after opening a bank account, so opt for a bank that offers no fees or low monthly fees for their checking and savings accounts. Some banks will waive your monthly fees if you keep a minimum monthly balance or use your debit card often.
6. Additional Banking Fees
Even if your bank doesn’t charge you a monthly fee, costs can pile up depending on your habits. Overdraft fees, excess transaction fees, paper transaction fees, foreign transaction fees, and ATM fees are common, so consider if these charges are within your budget when they happen.
7. On-Site Banking Security
A good bank will have several fraud prevention techniques in place and have a good track record when it comes to its server’s security. Quality banks will always offer deposit insurance via the FDIC, which protects your money and other assets if someone steals from your account.
8. Federal Banking Insurance
It isn’t enough to work with a bank that offers deposit insurance, as that won’t always protect your assets if the bank shuts down. Check your account disclosures to ensure your bank accounts are federally insured. Credit Unions, on the other hand, must be insured by the NCUA.
9. Cash Withdrawal ATM Limits
Cash withdrawal limits vary depending on your bank. Some banks will only allow you to take out $200 at a time, while others range from $500-$1000 a day. At the same time, most banks will adjust your limit, but it may take several days for an increase. This is done to prevent fraud.
10. Online Banking and Accessibility
No one wants to jump through hoops to receive their own money. Brick-and-mortar banks should have a branch or ATM near your home and overseas if you choose to travel. Online banks should also have a strong ATM network, so check which machines you can use for free.
