You may be considering your first bank account, and it may be because you recently moved to a new location or because you are not receiving satisfactory services from your current bank.
Some people also maintain different accounts in multiple banks to keep their budgets and expenses separate, while others do it through a bank for ease. By taking careful consideration of your lifestyle and needs, you can make the best decision on your bank accounts.
Here Are Considerations To Make Choosing The Best Bank For Your Needs
Explore diverse types of banks
Research on diverse bank types. But basically, everyday banking is best with retail banks. You can decide to either opt for an online banking platform or go for a brick-and-mortar option. You may also be eligible for a non-profit institution such as a credit union that helps to serve the banking need of people with professional interests, common employer, or labor union.
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Decide on the right size
The size of the bank will impact the ease of banking. For instance, a large retail bank would often have locations around the country and are often household names in the finance system. So, when you travel to other parts of the country for work or leisure, you’ll still be able to maintain easy access to your money. And if you’d rather opt for smaller banks, they often take deposits and lend locally, thereby building a more personal relationship with you.
Narrow your access
If you would prefer a physical and traditional bank, choose the one that is best in terms of proximity and with an ATM along with the wider service area. You do not want to have to travel a long distance in the case of any financial emergency.
Find out appropriate services and products
As a plus to basic bank accounts, many retail banks often let you open savings and checking accounts, loans, credit cards, and safe deposit boxes. Some banks offer extra services outside the basic banking services.
You may receive innovative features like smartphone apps that can be a viable option if you are constantly on the go. Check if the services the bank offers match your current and future needs.
Understand the costs that go into having an account
Banks often charge interest on loans, along with fees for other services. This includes overdraft fees, maintenance fees, wire transfers for account use, among others. Aside from small and large banks, credit unions also charge these fees – but might be lower at credit unions and online banks. So, before concluding on where you’d like to bank, put all these costs into consideration and compare at different banks to reduce fees.
Figure out the interests
If you are banking with an online bank or credit union, you’ll likely enjoy more interest on your savings accounts than a traditional bank.
Determining Which Bank Account to Choose
After making a decision on which bank is suitable for you, these tips will guide you in choosing the best bank account.
Set a goal
The essence of opening an account will dictate your choice of a bank account. For instance, if you think you’ll need to write checks to establish an emergency or pay bills so that you are covered especially in situations like a surprise medical expense or job loss. You might also want to save for a long-term goal such as a down payment on a house. Understand what your saving goal is specifically.
Pick the most suitable account type for your needs.
Decide on the right account type that makes achieving your business and personal goals possible. You might want a savings account or checking account for your day-in-day-out banking, a certificate of deposit (CD) for long-term goals, or a money market account for emergency funds.
You may also want to combine establishing a checking account while setting up a savings account. This will help you link the accounts and automate transfers between them, or manually transfer money to make it easy to achieve your savings goals.
Check transaction limits.
Understand the limits on transactions. For instance, savings and money market accounts limit you to only six transfers or withdrawals per month. Checking accounts have more room, but may restrict you to debit card purchases and ATM withdrawals of a specified dollar limit per day. You’ll want to consider a bank account with a higher daily spending limit if your purchases are typically above the limit.
Take note of the fees.
Your account type would determine the fees that are attached. Go over the bank’s website to see the early withdrawal penalties for a certificate of deposit (CDs), bank account maintenance fees, and other fees that may be required.
There are also free accounts that may not require monthly maintenance fees, and it is worth trying if you desire to cut down on banking expenses.
Assess the minimum balance requirements.
Find out what your prospective bank requires as a minimum balance. Or in total deposits at the bank to avoid monthly payment of Maintenance fees – could range from between $25 to $10,000.
So, if you want to cut out payment of maintenance fees, oot for an account that offers a balance requirement that does not overextend you financially. If your usual average balance is in the middle or often low, you may be better off creating a free bank account.
Some banks will waive monthly fees for you if you attain a particular amount in direct deposits in a stated period in your account, are a senior citizen, or if you have other products open with the bank.
Read the fine print
Do you understand the bank’s terms and conditions? Most bank customers do not take the time to go over that bank’s brochure and the bank’s account agreement.
Aside from a bank account’s daily limit on debit purchases, some banks restrict free checks you can write within a period to a particular number. In addition, the bank might have its stated policies on when funds will become withdrawable or the method of stopping check payment.
If your bank provides online banking features, go through the fine print as several convenience options may be addressed with internet services. You might have other charges that are connected with bill payment or online banking. For instance, you should consider asking questions about policies and how it affects you.