How To Choose The Bank That Best Suits Your Needs
Over a few generations, advancements in technology have completely reshaped the way we bank. Today, there are more options than ever before when it comes to choosing where you want to bank, and also how you want to bank. Whether you’re setting up your very first solo account, or planning to leave the bank you’re with, your options can be both confusing, and overwhelming.
The first step is to figure out what you’re looking for in a financial institution, as well as the features that you really need for your account. This will make the process of finding the right bank for you that much easier.
What Types of Banks Are There?
There’s three main types of banks for those looking to open a personal account, including traditional banks, online banks, and credit unions. It’s important to note that traditional banks and credit unions are quite different, as we’ll explore later.
Why Use A Traditional Bank?
These are typically the largest and most common type of the three institutions. Wells Fargo, Citibank, and Chase would be examples of traditional banks.
Pros:
- More services – Traditional banks offer a variety of financial services and products, such as checking and savings accounts, as well as credit cards
- More locations – These banks are easier to find since they generally have so many physical locations
- More ways to help – Often you get easy access to in-person help in addition to online services for those who prefer to do their banking digitally
Cons:
- Bad customer service – As a result of the size, many banks can’t provide one-on-one attention to their clients
- Higher fees with lower rates – Banks have huge overhead costs to pay their staff and maintain their brick and mortar locations. They also often have hidden fees along with lower interest rates
Why Go With a Credit Union?
Even though credit unions may seem similar to traditional banks, they actually consist of member-owned nonprofits. That means when your credit union does well, you do too.
Pros:
- Dividends – Credit unions let members share in their success, often resulting in extra money being earned through dividends
- Medium fees and reasonable rates – These institutions have the ability to offer lower fees and interest rates on loans, while paying higher interest rates on savings and checking accounts
- Better customer service – Members get the added benefit of voting privileges towards appointing board members, as well as having the time to spend quality one-on-one time with their clients
Cons:
- Less locations – Unfortunately it can be much harder to find an ATM or a nearby branch. This can make it tough to regularly get in-person help
- Bad technology – The user experience with their apps and websites can often be more difficult to navigate considering they have smaller budgets for web development
Why Use Online Banks?
These are the newest type of “banks” in the world, and they typically appeal to a younger demographic that doesn’t require much in-person help.
Pros:
- High interest rates – The biggest benefit that these online platforms have is the ability to offer higher interest rates since they don’t pay for physical space
- Low to zero fees – They often have accounts with zero fees, if not very low fees
Cons:
- No tellers – Technology glitches may get in your way, making it hard to deal with a real person
- Cash deposits – It can be fairly difficult to deposit cash unless your online bank has a network of ATMs nearby
Summary
In the end, you need to choose the option that best suits you. That may involve more than a single kind of bank, giving you the benefits of multiple. Just make sure to do your research, and take your time when picking a bank. It’s one of the most important decisions you’ll make.