Picking a Bank That’s Right for You

Not all bank accounts are created equal. Banks of all different types pop up all the time, offering new checking and savings options with various features.

Unfortunately, it’s not all good news for the customer. Banking fees are constantly changing and increasing, often with little warning other than the fine print.

Picking a bank that’s right for you means finding one with minimal fees, physical branches (if you need them), and friendly customer service to help you along the way.

Here are some things you should look for when choosing a bank.

What Type of Bank Is Right For You?

There are likely many banks for you to choose from in your local area. Banks come in different types which offer their own set of upsides and downsides. These categories of banks include:

• Large, National Banks: These have branches and ATMs throughout the U.S. If you prefer banking in person but travel to different cities, you’ll often have many options both inside and outside of your hometown. These banks are often on the cutting edge with online banking and other financial technology. In return, you’ll likely pay higher fees than the other banking options below.
• Smaller, Local Banks and Credit Unions: These banks and credit unions may only have one or a few branches in your local area and perhaps a few ATMs sprinkled around, too. You’re likely to get a more personal, small-bank feel, but you’ll have fewer locations to visit. Credit Unions differ slightly as they are owned and operated by their members, which can be advantageous for getting better rates when you borrow and save.
• Online Banks: These have no physical branches at all, and you do all of your banking by computer, phone, or mail. These banks often don’t have their own ATMs, but still may have networks of free ATMs or will refund the fees. The tradeoff is that you may get higher interest rates on your savings, fewer fees all-around, and the best online banking websites.

Know the Fees – And Avoid Them

Fees are assessed for all sorts of reasons in banking now, and many customers don’t find out about them until they are charged. Fees aren’t always assessed in a straightforward way, so don’t wait until you’re hit with one to find out. Among the many fees out there are:

• Monthly Service Fee: This is what a bank will charge you each month just for having an open account. Some banks still offer completely free options, while others charge you unless you keep a minimum balance, an average balance, or have a direct deposit from an employer. These rules and restrictions can be complicated, so make sure to ask a bank employee if you’re struggling to understand how it works.
• Non-sufficient Funds Fee and Overdraft Fee: If you attempt to write a check or make a payment but don’t have the funds to cover it in your account, your bank will likely hit you with a non-sufficient fund fee. Making this mistake comes at a high price as these fees are often $25-35 per infraction. Some banks offer overdraft protection with another account, but still charge overdraft protection fees when you use this service. These fees are often lower than the plain non-sufficient funds fee while other banks offer overdraft protection free of charge.
• ATM Fee: Most banks charge a fee for using their ATMs if you’re not an account holder. These fees are often $3 and go up from there. Avoid these fees by choosing a bank that has ATMs convenient to your location. Even better: some online banks will reimburse your ATM fees regardless of which ATM you use.

This isn’t a complete list, so find out if there are any other fees associated with your account before learning the hard way.

Look For Features You Want

Banks vary widely in the features that are available. Before opening an account, consider the features that are most important to you and look for accounts that include them. Features include:

• Deposit Insurance: This is a must! Wherever you put your money, it should be FDIC insured for banks or NCUA insured for credit unions. This ensures that your deposits are safe, up to a certain amount, if the bank fails.
• Local Branches: As explained above, some banks have branches nationally while others have no physical locations at all. If you prefer banking in person, make sure you’ll have a local bank branch to walk into.
• ATM Network: The network on ATMs offered varies widely from bank to bank. Some large banks have ATMs across the country whereas local banks probably only have a few in your hometown. Banks may also be part of certain networks that let you use ATMs for free even if you don’t belong to that bank. No matter what your bank of choice offers, make sure you can access your money without paying a ton in fees.
• Online Banking: Most banks now offer online banking, but the features available online vary widely. Smaller banks may only have a simple website that limits transactions you can conduct. Larger and online-only banks often have more features available to you online. A popular feature is the ability to pay bills online from your bank account. If this is a feature you’re interested in, find a bank that doesn’t charge for this service.
• Customer Service: No one wants to deal with unhelpful or rude customer service. Sites like MyBankTracker.com compile reviews that include interactions with bank employees. You can always go old-school and check the Better Business Bureau to see how banks are rated and if there are many complaints.
• Interest Rates: It can be hard to find a worthwhile interest rate for checking and savings accounts these days, but that doesn’t mean that they’re not out there. This may be more important to you if you intend to keep a larger balance in your account. You can compare rates on sites like Bankrate.com. Of course these rates are subject to change at any time.
• Other Products: Aside from simply holding an account, you may be interested in a mortgage, auto loan, certificate of deposit, or credit card from your bank. Keep in mind that you’re never locked into the bank where you hold checking and savings accounts, so be sure to shop around when considering these other services.

If you’re unsure where to start looking for a bank, ask around to friends and family about their experiences. You can also search online at some of the sites listed above to get an idea for what bank is right for you.