The ins and outs of banking can be complicated. Fortunately, you have a lot of options to choose from when looking for a bank.
Knowing your priorities can help you find the bank that best meets your needs. Here’s what you should keep in mind before opening an account.
1. Safety First
Above all else, you want your money to be secure when you open an account with a new bank. Usually most online and brick-and-mortar banks are insured by the Federal Deposit Insurance Corporation, but not all are.
The FDIC insures up to $250,000 of your bank deposits, so even if the bank fails (heaven forbid) you’ll still have $250K. On the other hand, if your bank isn’t FDIC insured, and they close, you will lose your money. So make sure your bank is backed up by the FDIC!
2. Rates and Fees
You don’t just want your bank to hold your money; you want it to grow your money. One of your first steps should be comparing interest rates and seeing which options will give you a better return.
For instance, Varo for both Android and iOS offers a 2.1% APY and no monthly fees, no foreign transaction fees and free withdrawals at more than 55,000 Allpoint ATMs. If solid interest rates and low fees are important to you, Varo is a great option.
3. Are You Best With Cash, Checks or Credit?
To help decide what bank to choose, consider how you pay for things. If you use cash often, make sure you use a bank with ATMs in your area and low withdrawal fees.
If you prefer to pay with paper checks, make sure your bank offers them. (Not every online bank does!)
Think about your spending habits and see how banks match up. Does the bank offer deals on personal loans or low-rate credit cards? Banks do a lot more than just hold your money!
4. Read the Fine Print
With big banks, what you see isn’t always what you get. To make sure there’s nothing in the fine print that could hurt you in the future, read the terms and conditions and ask lots of questions. You have nothing to lose by doing your due diligence.
5. Get Mobile With Your Banking
These days if you have a smartphone you can do your banking any time you have an internet connection. Most big banks have apps that give you access to your account on your phone, but some online-only banking options have become popular too.
For example, Chime for both Andoid and iOS is an online banking app that helps you get your paychecks early, has no hidden fees, and helps you grow your savings. You get all the benefits and security of a big bank, but the convenience of online banking with Chime.
6. Communication and Service
If you want direct, face-to-face customer service when you have an issue, consider going with a small, local bank and avoiding big chains. But be sure they have branches in places you want to be! If you move to a different neighborhood or a different city, you’ll have to move banks too.
If you prefer the convenience of online customer service, online banking could be for you. At the very least, make sure your bank has quality customer service that can handle your concerns in a timely manner. Many banks and financial services companies offer free online chat, even if you don’t have an account. You can use that to test whether they suit your information appetite.