When it comes to choosing a bank, there are no shortage of options. From big banks to local operations, you have your pick. So where should you begin?
Banks vs. Credit Unions
First: Decide between banks and credit unions. Banks are for-profit institutions that may be privately owned or publicly traded, while credit unions are nonprofit and owned by its Members.
When comparing banks and credit unions, you typically find that banks offer a wider array of financial products and services and an abundance of local and national branch offices and ATMs. Meanwhile, credit unions usually boast lower fees and more competitive interest rates.
Choosing your Bank
Next, consider the following to help narrow down your options:
- Bang for Buck. In the end, the goal is to maximize your money. And your bank should help you do that. Beware of hidden fees and added charges for typical bank activity. Such fees include: the cost to open and maintain the account; ATM charges; overdraft fees; minimum account balance requirements; transaction fees, etc.
Pro tip: While credit unions tend to shine in this arena another option to keep on your radar is online banks. They tend to offer free checking and savings accounts, lower fees and the best interest rates.
- Keeping Current. In an ever-changing world, you want a bank that keeps up with the latest and the greatest. From technology advancements to the latest products and services, look for banks that are setting or keeping up with the trends. At the very minimum, banks should offer the option of managing your account both online and on-the-go. Look for options like mobile apps, electronic deposits, transfers and bill pay, and other tools to help you maximize your time and money.
- Safe and Sound? The whole premise of a bank is that it’s safe keeping for your money, so be sure to choose a bank that’s insured. The financial institution you choose should have Federal Deposit Insurance. Banks – both local and national – offer deposit insurance from the Federal Deposit Insurance Corporation (FDIC) and credit unions offer it through the National Credit Union Administration (NCUA).
These agencies ensure that if your bank gets into trouble, you’ll get your money back. The standard insurance rate is up to $250,000 per depositor, per insured bank. You can check to see if your bank or credit union is insured by contacting the FDIC or NCUA, respectively.