When it comes to banking, I think most people just stay with whichever bank they started with initially. The majority of people out there don’t put too much thought into what their bank has to offer them, and just look at it as the place they deposit their paychecks and the logo on their ATM card. Unfortunately, by not taking a closer look at your bank your money may not be working for you as well as it can be. There are many aspects to consider when choosing where to bank and depending on your financial situation, goals, and financial needs, your choice of bank can go a long way to organizing your finances properly. So take another look at your bank, and keep these things in mind.
Savings accounts
The interest rate you are getting on your savings account can differ greatly depending on the type of account you qualify for and the bank you choose. For instance, some banks like Citi are offering online savings accounts with interest rates in the 4.5% range. Compared to a lot of major banks general savings accounts (which offer somewhere in the .1% to 2% range), that can be a big improvement.
Online banking
Just about all banks have online banking now. Online banking is a necessity nowadays, as the convenience of being able to check your bank accounts at any computer has become a normal practice in our society. Make sure that your bank has a nice website with all the features you are looking for (including funds transfer, bill pay, account services, etc), and make sure you don’t have to pay extra to use the site. Online banking is so common now, you should have no problem getting it for free.
Also, if you are interested in banking via your mobile device, look into your bank’s mobile solution (if they have one). Some major banks have rolled out their mobile solutions via a web browser like Wells Fargo and Bank of America while others like Chase are using a text message format. Either way, mobile banking is going to become what internet banking is today, so it’s something to take into consideration.
Bill pay
Being able to pay your bills online is great. I’ve been doing it for at least 6 years now, and I couldn’t live without it. You can specify the people you want to pay (be it a company or just a person), and even receive electronic bills from companies that participate. That means no more writing checks, licking stamps, and filing paper bills. The time it takes to pay all of your bills online in one swoop is a fraction of what it would normally take you doing it manually. Make sure that your bank has a good bill pay system that is easy to use. Some banks still charge a monthly fee for bill pay, while others are free. A lot of times you can have the fee waived if you meet certain criteria.
Credit cards
Not everyone gets credit cards from their primary bank, but if you can it’s a nice combination. To be able to see all of your balances (including credit cards) on one online screen is a big plus. So, look at what credit cards your bank has to offer and compare them to what you could be getting elsewhere.
Checking packages
Most major banks nowadays have checking packages available that combine a lot of features above into a nice packaged deal. For instance, you might get a checking account, savings account, and free bill pay if you choose a certain checking package. There are a plethora of options out there, just be wary of the minimum opening deposits, monthly fees, and minimum balance needed to waive any fees. Also, look at the terms for withdrawals and ATM charges.
Investments
If you also have an investment portfolio, you may consider bringing that in to your primary bank as well. For the same reasons as credit cards, having your investments all in one place with your primary banking accounts allows you to have a snapshot of total financial situation by logging in to only one site. Not to mention, some banks have special consolidated statements that allow you to receive one statement for all your accounts. Wells Fargo and Bank of America both have great package deals that include investments. At Wells Fargo they offer 100 free trades a year (including mutual funds!) when you open an investment account that is linked to a PMA checking package. Bank of America has a similar product that offers 30 free trades a month when you have a certain amount of balances in your Bank of America deposit accounts. If you are a frequent investor, these type of incentives can really make a positive difference in your investing expense over the course of the year.
Fees
Fees are definitely something to consider when choosing a bank. Whether it is ATM fees, overdraft fees, account fees, credit card fees, or anything in between, you want to make sure your bank isn’t unnecessarily taking your money. Usually fees are lowest (or even non-existent) at specialized banks and credit unions, and highest at the major banks. Use that knowledge to your advantage. If you aren’t looking for a full suite of banking products, and just want the best interest rates and lowest fees, then a smaller local bank or credit union might be the best choice for you. On the other hand, if you are looking for a comprehensive banking solution at one place, and you have the right amount of balances to avoid fees, then one of the major banks might suit your needs a little better. It will all depend on your individual situation, so compare the fees between banks and see where it might affect you.
Choosing a bank is about deciding on the right combination of features for you, and seeing which bank offers the most value in that combination. There are many choices, and if you are responsible financially, they will fight for your business. Take some time out to reevaluate your bank and make sure you’re not missing greener pastures somewhere else.
