Choosing a Financial Institution

At some point, everyone needs a financial institution to house their money. Whether you are new to banking, or feel the need to make a change, there are a lot of factors to consider. There is no one right answer for every person. Choosing the right bank starts with knowing your individual needs and preferences. Don't let the freebies cloud your judgment. What really matters is that you get the account that meets your requirements.

The top ten things you should consider when choosing a bank are:
  1. Security of your funds. Make sure the bank is insured by the Federal Deposit Insurance Corporation (FDIC). Check out Common Banking Terms to learn more about the FDIC.
  2. Fees. Find an account that does not charge an exorbitant amount of fees and make sure you understand what you’re paying for.
  3. Ease of deposits. Even in this age of direct deposit, everyone has an occasional need to deposit checks or cash. If your bank does not have a physical location near you, they may offer mobile or home deposit services to make check deposits fast and simple.
  4. ATM fees. If you use your ATM card frequently, consider the fees your bank charges for ATM usage. Some banks offer to rebate ATM fees up to a certain amount each month. If you travel frequently and can’t always use your bank’s ATMS, this might be important to you.
  5. Interest rates. Interest rates work both ways: the rates you receive on your money on deposit with the bank, and the rates you pay when borrowing.  Ideally, you will find an account that pays higher-than-average interest on your deposits and charges lower-than-average interest on your debts.
  6. Online banking features. Do you like to use online bill pay? Choose an account where it is free.  Need to transfer money to others regularly? Make sure your bank is equipped to process those transactions quickly and easily.
  7. Minimum balance requirements. Some accounts require you to maintain a daily or monthly minimum balance to avoid fees. Make sure any minimum balance requirement is something that you can comfortably manage.
  8. Branch availability. Some people cannot be comfortable with a bank that doesn’t have a physical location nearby. Think about your needs and wants and see if this important to you.
  9. Customer service. When you have a problem or question, the last thing you want is to sit on hold, or get a customer service representative who isn't able to help you. Ask around to find out what banks make your friends happy! You may also want to ask where the bank’s customer support center is located (e.g., nearby or in your town/state versus out of state or in another country).
  10. Availability of funds. Some banks offer immediate or early availability of funds while others have a holding period. Make sure you understand your financial institution’s policies to ensure you have access to your money when you need it.

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