With so many financial institutions competing for your business, you might find it a little confusing to select one. Your choices include national, regional, community, and online banks, as well as credit unions and mobile banking apps (i.e., “neobanks”). We’ve compiled a short list of factors for you to consider before making a final choice.
You may want to have a single source for all your banking services, including checking, savings, credit cards, and borrowing. However, you might prefer to look for the best deals on each account type. For example, you can choose free checking from a local bank and a high-interest savings account from an online bank or neobank.
Checking accounts can be costly. If you want to keep your expenses down, look for institutions that offer “free” checking accounts. While no account is truly free, these have small or no monthly maintenance fees, minimum balance requirements, or overdraft fees. Free accounts may come with strings attached, such as a requirement for direct deposits, no paper checks, or a limit on the number of checks you can write each month.
If you are a dedicated saver, you deserve the highest interest rate you can get on regular savings accounts, certificates of deposit (CDs), and money market accounts. You may want to check the rates offered by branchless online banks and neobanks, as they can afford to pay higher rates because of the money they save by avoiding brick-and-mortar branches. Your savings, and indeed all your accounts, should be insured by the Federal Deposit Insurance Corporation or the National Credit Union Association.
Most ATM users want the machines to be nearby and free to use. Banks with many branches, such as the national banks, may offer the most extensive ATM networks. However, other institutions may join large networks with ATMs located at many non-banking locations. Look for a network that doesn’t charge a usage fee for in-network transactions. For some folks, access to international ATMs may be a factor.
Many consumers like to speak with an actual human across a desk when they have problems and questions. If that’s important to you, pick a bank with a branch near you. Conversely, if you would rather communicate electronically or over the phone, choose a bank offering a good customer service department and an online chat facility.
If you are self-employed or own a small company, you’ll need a bank offering business accounts and services. You may find it easier to arrange business loans from a bank where you already have an account. In fact, you might want to develop a relationship with a personal banker who will facilitate your requests. If you engage in business abroad, you may need a bank that offers letters of credit and other international business services.
Younger consumers often prefer mobile apps to handle their banking needs. Many institutions offer banking apps, but some are better than others. Look for reviews of the top mobile apps to find the ones that will work best for you.