Choosing a bank is a big decision. After all, this is the start of a relationship with the institution that will help you manage your finances for a long time to come. A misstep here could cost you a lot of money over the long haul. Conversely, making the right choice could help grow your money and save you a ton of headaches. So how do you make sure you’re choosing the right bank? There are plenty of factors that influence your choice but the two primary ones are personal recommendations and convenient locations. However, the most important thing when choosing a bank is making sure it’s the right one for you. Before you make any decisions, make sure that you evaluate these key factors.

Factor #1: Do You Need a Brick and Mortar Location?

Many of today’s banks no longer have brick and mortar locations. Instead, they exist entirely online. In order to make deposits, you simply set up automatic deposits into your account or scan checks into an app on your phone. It’s a simple, streamlined process that makes it easy to access your money at any time of the day. If you do encounter problems, your online banking institution will provide customer service to help you sort things out. What most people don’t realize is that online banks often have fewer fees and better rates for loans since they don’t have the expenses associated with keeping a physical location up and running. However there are several key advantages to a brick and mortar location:

  • It’s easier to develop a personal relationship with the people handling your money since you can see them face to face
  • Many people find it easier to have conversations and solve problems with a person sitting across from them
  • Physical banks are less cumbersome for cash transactions, especially cash deposits

If you do opt for a brick and mortar bank over an online-only institution, make sure they have locations close to your home or office. If you travel frequently, you may also want to consider a bank with a wide range of locations across the country.

Factor #2: Do You Want a Regional Location or a Local Bank?

National bank, regional bank, or community bank: how do you decide? Each one has its own advantages. A community bank, for example, typically stays small. They’re just the right size for the community they serve and are designed to create a more personal environment where you can get to know your banker. Community banks are often less focused on profit, since they continue to prioritize other values. Small banks may be able to offer rates and options that you wouldn’t be able to get on loans from larger banks, but they may also not have as much freedom in their bylaws regarding the loans they can offer. As banks get larger, however, they offer greater lending potential, a wider range of services, and larger branches. It’s important to carefully consider which of these is more important to you when you’re choosing a bank.

Factor #3: Do You Want a Bank or a Credit Union?

Credit unions are typically local facilities. They’re usually created by specific local areas, institutions, or businesses in order to support their members. Credit unions often offer key financial advantages including lower fees for using the bank and higher interest on your interest-earning accounts. Because they are local, however, credit unions tend to only have branches in local areas. They may also be slower to roll out new apps and other technology that will improve your banking convenience. Credit unions, like other local banks, can often create a deeper relationship with their users, but larger banks can provide a wider range of services.

Factor #4: What Features Do You Need From Your Bank?

As you’re choosing a bank, you need to carefully consider the features that are most important to you. Before you create an account, it’s also important to understand exactly what you need from your bank and whether or not the bank you’re considering is the right institution for you. Some important features may include:

  • No fees associated with your checking account. In some cases, your bank may offer free checking if you use automatic deposit for your paycheck or if you keep a certain minimum balance in your account.
  • A lack of overdraft fees. This is especially useful if you’d like to link your savings account to your checking account, which will help prevent minor overdraft incidents from adding up to serious expense.
  • Free ATMs. You shouldn’t be charged to access your own money! It’s also helpful to find a bank that will provide free ATM usage if you have to use another bank’s ATM.
  • Online bill pay. This will allow you to take care of your bills each month without having to stress about when each payment is due.
  • A secure, trustworthy app. An app that you can trust and that will allow you to take care of the bulk of your banking needs in the palm of your hands is essential.

The Bottom Line

There is a wide range of factors that go into a choosing a bank. As you’re considering your options, make sure that you carefully consider all the factors that are most important to you. While there may be some features that you can do without right now, you’ll want to carefully consider which ones you’ll need in the foreseeable future as well. You want a bank that will grow with you – whether you’re opening your first account before you head off to college or combining accounts with a new spouse. As you choose your bank, make sure that you consider your needs not only today but for many years in the future so that you’ll be happy for years to come.

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