Joining a bank is like a new relationship. You just want to skip the apprehension at the beginning, and go straight to the part where both sides are happy.
But, of course, we can’t do that. Luckily, there are more banking options available for consumers than ever before between traditional banks (like Bank of America and Capital One), credit unions, and new financial technology banks (like Aspiration).
Picking the right bank can be stressful. How do you know what services are the best? How do you even know what services you even want? Where are the hidden fees, and how can you avoid them? Here’s a breakdown of what you should look for when choosing the right bank.
The types of accounts
The two most standard bank accounts today are savings and checking. The former is for placing your money and the latter is for accessing it when you pay bills and make purchases.
With both, some banks have the often-mentioned “hidden fees.” You may not notice in real-time, but they’ll add up. Here are some things you should look for when deciding where to place your money.
What to look for in a checking account
- Low/No maintenance fees.
- Reimbursement for ATM fees – This is often a feature in online-only banks.
- Low minimum balance fees– sometimes this is waived if you enroll in direct deposit.
- Overdraft Protection – A checking account is meant to be a vehicle for your money, and not where you keep most of it, so it’s inevitable that you may forget to transfer funds from your savings to your checking. You shouldn’t have to pay $30 for a small mistake.
What to look for in a savings account
- Competitive interest rate.
- Automatic Savings Transfers – These are a great, low-effort way to put a little money away.
- Low/No Maintenance Fees– this can be waived with a minimum balance typically.
- Accessibility – Online banking makes life easier.
- Liquidity – Sometimes life happens and you’ll need to access your funds. Federal regulations allow six savings withdrawals each month. Some banks can limit these even more and charge withdrawal fees for any number exceeding a few.
Tying the knot
Your bank should be a place you feel comfortable with. It should also have the mobile banking infrastructure to allow you to access your money on the go.
If having access to nearby ATMs is a priority, check out a credit union, as they usually allow you to use ATMs from another credit union.
Something you may want to consider also, is having accounts at multiple banks. You may find that one bank as a checking account that suits you, while another has a savings account with better interest. Just make sure you aren’t spread out over too many banks.