Want More Bang for Your Buck? Choose the Right Bank

Everyone needs a bank – but you need a bank with low fees, low interest rates, and the right features to get the most bang for your buck.

You’ve worked on dissolving your debt with the snowflake method. Maybe you’re starting to save more by practicing micro habits that help you reach your savings goals

Whether you’ve been paying attention to your credit score for months, or you’re at the beginning of your journey to change your financial mindset, there’s one thing that’s certain: you need a bank to make financial progress.

Making the Banking Change

Have you had the same checking account since you were 12 years old? Maybe it’s working great for you, or maybe it’s time to take a step back and see what else is out there. After all, some banks offer great savings accounts with high-interest rates, but they charge expensive ATM fees. Other banks have low ATM fees but don’t offer many online banking features. Just exactly how do you choose a bank where you’ll get the most bang for your buck? Start by following these steps.

Write Down Your Financial Priorities

Person writing on a list
Shutterstock

You may be thinking that your first step should be to check Google. But actually, you should pause and reflect before you begin your online research. When you decide to start thinking about changing banks, you should make a list of your financial priorities first. What do you care about the most in your life? 

If your answer is long-term stability, then maybe you’re looking for a bank that offers a high-interest savings account. Check out the 8 best savings accounts according to Money.com, including Vio Bank, Capital One, Ally Bank, PenFed Credit Union, and more.

If you’re looking to buy a home in the next year, then a bank with good mortgage rates should be on your list. Citibank, Bank of America, and Citizens Bank may be great options for you – or you may decide to leave your mortgage out of your new bank search and choose a mortgage lender instead of a bank. 

Or, you may not be looking for high-interest savings accounts or a mortgage at all. What are your priorities? Write down your priorities for both the short-term and the long-term. As you continue your search, make sure that the banks you’re considering have offerings that match your needs!

Choose Your Account Types

Your next step is to think about what types of accounts you’ll need. It’s very popular (and practical) to start with both a checking and savings account. But do you want more? While almost every bank will offer a checking and savings account, you may also want a money market account or a certificate of deposit (CD). Your current bank may not offer these, or they may offer them at rates that don’t earn good interest. Or, your bank may charge high fees for your current accounts.

Write down the accounts that you want. Remember, while you may feel loyal to your current bank, there’s nothing wrong with moving your money to a new financial institution that has the account type that you want. Remember, banks are businesses, and if they aren’t doing enough to keep your business, that’s their fault – not yours. So don’t feel bad about not being loyal to your bank!

Checking, savings, money market, and CDs are the beginning. You may want to open an individual retirement arrangement (IRA) or a brokerage account. Take notes on what you’re looking for before you switch to a new bank!

List Your Top Banking Features

Woman taking cash from bank teller
Shutterstock

An increasingly popular feature that consumers are looking for is the option to have multiple savings accounts. If that’s important to you, then write “multiple savings accounts” down on your list! NerdWallet has listed Alliant Credit Union, Barclays, Capital One 360, and Synchrony Bank as a few of the best banks to choose from if you’re interested in multiple savings accounts. Some of these banks will let you open more than 15!

Research Banks and Credit Unions in Your Area

Now is the time to start researching the banks and credit unions in your area. Forbes has listed the top banks in each of the 50 states, excluding the major national banks of PNC Financial, J.P. Morgan Chase, Bank of America, U.S. Bank, and 11 others. You may want to start by looking at the Forbes list, or you may want to start by performing a Google search for the banks that have locations that are the closest to your home. Think about your lifestyle and your needs.

Consider Online Banks

Woman using online banking on laptop
Shutterstock

While older generations may think the idea is ridiculous, online banks are a decent option for consumers who are web-savvy. If you care about the mobile features of your bank more than you do about having the ability to go into a branch and speak to a representative face-to-face, then an online bank could be the best fit for you. 

Online banks also typically charge lower fees than banks that have to pay for brick-and-mortar locations. So if you’re looking for a feature-rich online banking experience and lower fees, then you’ll definitely want to take the time to investigate online banking options. Some of the most popular online banking options include: Quontic Bank, Discover Bank, Axos Bank, Ally Bank, nbkc bank, iGObanking, and Salem Five Direct.

Watch Out for Fees

When you first sat down and brainstormed your financial priorities, you wrote down what was most important to you. But what you may not have thought about is what could happen if you land in less-than-ideal circumstances. 

For instance, if you have a low balance in your checking account, and you use your debit card on a Wednesday to make a purchase that is more than your bank account balance, what happens next? Well, if the money is withdrawn on Thursday, and your funds from your paycheck aren’t deposited until Friday, you may end up paying an overdraft fee – or more than one, depending on how many transactions hit your account.

Also, it’s good to know that overdraft fee protection programs usually aren’t worth it. According to a 2017 survey from the Consumer Financial Protection Bureau, people who signed up for overdraft protection paid about 7 times more in fees than those who didn’t. So that’s an add-on that definitely isn’t worth it!

Ask About ATMs

Line of people at outdoor ATM
Shutterstock

Do you regularly use ATMs to withdraw cash? If that’s the case, then as you’re researching, you should spend more time reading about banks with ATMs near you than any other type of bank. If you are interested in online banks, it’s good to know that many online banks have extensive ATM networks. As always, research before you commit!

Visit a Credit Union

Here’s one last step you should take before you move your money to your new bank: visit (in person) a credit union near you. If there are no credit unions near you, then you can skip this step. The major advantage of credit unions is that they are more flexible than big banks. It may be easier for you to get a loan if your credit score is low, and once you have the loan, it’s more likely to be offered to you at a lower interest rate than what you would receive at a big bank.

Usually, credit unions have lower fees than big banks and better customer service. Because they are local, they also are more involved in the community, and they often make a strong effort at supporting diversity. However, the small, local nature of credit unions can be a double-edged sword. They may offer fewer features and options than a big bank does. If mobile banking or online banking is extremely important to you, then be sure to ask and get answers to all your questions about those features before you sign up for an account with a credit union. 

Visiting a credit union in person is a smart idea because you’ll get to learn so much more about the experience than if you were to simply look at their website. Their online presence can only tell you so much!

Search Your Region 

Smiling woman banker assisting customer
Shutterstock

Some people are more flexible than others when it comes to their banking needs. For example, if you think there’s a strong possibility that you might move to a new city in the next few years, then you probably care less about the convenience of the bank branches near you. 

If you’re thinking about moving soon or if you’re looking for a bank that offers a good combination of in-person and online services, then start by researching your region. A regional bank may be the “best of both worlds” solution for you if you’re looking for some of the features of a credit union and the flexibility of a big bank. Bankrate’s ranking of the 8 best regional banks is a good place to start, especially if you’re looking for a bank on the east coast. 

Get the most bang for your buck at the bank by taking the time to think about your financial priorities, researching the banks in your area, and knowing what to look out for.

Author
Latest News