7 Things You Should Consider When Choosing a New Bank
If you are in the search to open a new bank account there are plenty of things that you need to consider. Besides choosing a bank that is in your location, it is important to consider factors like mobile banking, fees, customers service, and interest rates that the banks offer.
This article is going to break down the 7 most important factors that you need to consider when choosing a new bank in no particular order. The factors most important to you will depend on your specific situation.
1. Banks vs Credit Unions
The first decision you need to make when choosing a new bank is to decide whether you want to open an account at a bank or a Credit Union
The biggest advantage of larger banks is that they have branches open around the country, while the Credit Unions tend to be located in geographical regions around the country. Bigger banks are usually the first to roll out new apps and other technological innovations since they have a much large budget.
Credit Unions on the other hand, are great for people who like a more personalized customer service. They are known for emphasizing customer service and trying to maintain a first name relationship with their clients. While larger banks typically only treat higher net worth clients with above average service.
Credit Unions are also known to provide higher interest rates on deposits, so if you plan on putting your money into the bank, it can earn you more money. However, with the increasing availability of online banks, there are more and more banks that offer competitive interest rates that are similar to Credit Union.
2. Mobile/Internet Banking
The next thing to decide is what kind of features you need for mobile banking. Some banks allow customers to be able to wire, deposit, and transfer funds through their mobile banking app, without needing to visit a branch.
If you are someone that needs specific features in your banking, make sure you check the mobile banking apps of each bank or credit union. Some banks have outdated mobile apps that have very few features, while other larger banks tend to have mobile apps that allow you to do everything.
3. Customer Service & Support
Customer service and support are two important issues for a lot of people who are looking to start a bank account. If you lose your ATM or Credit Card, you need to be able to call someone to get help. Some banks are known for their terrible customer service, while others are known to provide tier 1 service to all customers.
The best way to gauge a Banks customer service is to ask friends and families how their banks are. If you look up reviews online, they will typically either be customers who had a bad experience or someone who is leaving a fake five star review. Most real customers don’t take their time to rate a bank, even when they have a good experience. Ask people you know and get a trusted opinion from a reliable source.
If you are someone who likes to go in person to your bank then the location of the bank will matter. If you find that you travel a lot and need access to banking around the country, then you are probably going to open an account at one of the big banks like Chase, Wells Fargo or Bank of America.
Conversely, if you don’t travel often and don’t need a national bank, you can look at smaller independent banks or Credit Unions in your local area. Keep in mind that your locations will be local, so if you are out of state you won’t be able to visit the bank in person.
With the availability of mobile/internet banking, the location of a bank is becoming less and less important. Since you can now deposit checks, send wire transfers, and open up new accounts online at most banks, this is a factor that is no longer a main feature when looking for a bank.
5. Offers and Promotions
The last aspect you should look for when opening up a new bank account is the different promotions and offers each bank has. Most banks will have special discounts or offers that they give to new customers who open up accounts at the bank.
Some banks will offer special interest rate accounts that provide a better than market interest rate for the first year, while others might offer a special credit card with discounts. Do your research and you will be able to look at the various offers each bank has and decide what is best for you.
6. Fees and Interest Rates
Another point that some people over look when opening up a new bank account are the fees associated with that account. Some banks have hidden fees that will try to milk every last penny from you, while others have fees depending on how much money you have in the account.
If you plan on keeping a large amount of money in your account, you typically don’t have to pay maintenance fees at most banks. However, if you fall under a certain threshold, some banks will charge you a monthly maintenance fee to keep the account open. This fee is essentially a tax on lower income individuals who aren’t able to keep a specific amount in their account.
Look up the fees of each account the bank offers and be sure to ask the exact fees you will end up paying each month. In addition to fees, you will also want to see how much they charge to use ATMs, transfers, and other banking services that can vary from bank to bank.
7. Private Banking
If you happen to be a high net worth individual, then another aspect of the banking system that will be open to you is private banking. Typically high income earnings like Doctors, Lawyers and business owners will get access to private banking if they have a certain net worth.
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Private banking usually offers customers a direct line to their banker, the best interest rates on loans, and the highest credit lines. If you qualify for private banking, it is definitely something that you should take advantage of.