With financial institutions found everywhere and new ones entering the fray almost every day, it would appear to be impossible to choose the right bank that would help you make most of the services. Moreover, each financial institution offers different products that are unique to them. These financial institutions vary from national banks to credit unions to community banks to digital-only banks. Without confusing yourself too much, you can start by knowing what services and features your business or transactions need.
Types of accounts
There are different types of accounts: Checking, savings, money market, and products like certificates of deposit, credit cards, and loans.
Some people would need all of the above accounts and services. They can either have all the accounts in a single bank or spread the money to get the best deals from each bank. Since there is no restriction on the number of accounts and the number of banks or credit unions you can choose, you can research and find out the best rate for each aspect and choose the right one for each.
Fees
Some may charge fees for monthly maintenance, ATM use, overdrafts, transferring money between accounts, and sending you paper statements or any other feature they have. If you want to complete everything under one roof, look into the interest rates of the credit cards and loans and compare them with the rates you would receive on deposit accounts. An annual percentage yield (APY) could be as little as 1.50% for a savings account. Though it may not appear to be a major amount, it’s much more than the generally given rates. If you want to compare rates, you can look it up online, as most banks and credit unions have their rates and fee schedules on their websites.
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Credit unions and online banks
Credit unions are not-for-profit, member-owned institutions that usually offer higher Annual Percentage Yield (APY) on deposit accounts and lower fees than traditional banks. Today, online banks offer the best terms as they have no expenditure on maintaining a physical branch.
Each bank is different
Before choosing a bank, you should be aware of the bank’s practices. Would you be able to visit the bank often? Would you have to make a lot of online transactions? Would your institution permit cash withdrawal in any city or state? You can also check the number of branches and ATMs the banks have. If your business rarely needs physical cash transactions, consider opening an online bank account.
Using the latest technology
Banks that use advanced technology can lend you a helping hand in numerous situations. Banks that have mobile apps make remote check deposits possible. It is not advisable to choose a bank that doesn’t have quick transfer options to friends and family, computerized budgeting tools, savings plan generators, and specific security policies. Though some credit unions and community banks provide a simple version of these features, national banks always provide the latest technology — they also have more branches and ATMs everywhere in the country.
Make sure the money is safe
If you didn’t know, you must make sure if your money is insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) for a credit union. Both of them are federal agencies, and they ensure to back up to $250,000 for you if the bank or credit union fails. Today, nearly all banks and credit unions are insured. If you are not sure if your institution is insured, you can check the FDIC or NCUA website and check if the institution you chose is listed there.
Nevertheless, finally, choosing the right bank and the correct account depends entirely on your current situation and future plans. You don’t have to stress out right now, as you can always switch banks if you are not satisfied with the service. Spending days of extensive research and asking people who already manage several bank accounts would also give you more clarity.
