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How to Choose a Bank That’s Right for You

As we transition from childhood to adulthood, there are certain milestones we all must pass. Among the earliest, most significant, and biggest pain in the you-know-what is choosing a new bank. 

Whether you’re starting your first job, saving for a big purchase, or simply looking to better manage your finances, the bank you choose can have a significant impact on your financial well-being. 

With so many options available, choosing the right bank can feel overwhelming. But if you work through it step by annoying step, it’ll be over before you know it.

Factors to Consider When Choosing a Bank

When it comes to choosing a bank, there’s no one-size-fits-all solution. The best bank for you depends on your individual needs and priorities. So before settling for wherever your mom/dad/betrothed banks, think about the most important factors influencing your decision. 

Type of Bank: National, Local, or Online

The type of bank you choose can impact your banking experience in significant ways. There are three main types of banks to consider: national, local, and online.

  • National banks are typically the largest, with branch networks that span the country and a wide range of options. However, they also tend to have higher fees and lower interest rates. Some of the most venerable may also lag behind more modern banks in user-facing technology, including their apps and available features. 
  • Local or regional banks, including credit unions, offer more personalized service, often with lower fees and a more community-focused approach. However, their branch networks may be more limited, and they may not have as many account options or advanced technology — or they could be eons ahead of their behemothic competition. You really just never know.
  • Online banks are a newer option that have gained popularity in recent years. Also called neobanks, they frequently offer low fees, high-interest savings accounts, and advanced mobile and online banking features. However, they may not have any physical branches, which can be a drawback for some customers.

Convenience: Location, Hours, & Availability

When considering convenience, think about factors like the location of branches and ATMs, hours of operation, and availability of customer support.

If you prefer to do your banking in person, look for a bank with branches located near your home or work. If you travel frequently or often find yourself in areas without your bank’s branches, you need a bank with a larger ATM network or fee-free access to third-party ATMs.

Speaking of travel, if that’s something you find yourself doing frequently, a bank with reliable online access or branches far and wide may be a must.

Banking hours are also an important consideration. If you work a traditional 9-to-5 job, you need a bank with extended or weekend hours. Some banks also offer 24/7 customer support, which can be helpful if you need assistance outside regular business hours.

A bank with convenient locations, hours, and availability can save you time and hassle in the long run.

Fees: Account, Overdraft, & ATM Fees

When choosing a bank, it’s important to consider the fees associated with its accounts and services. Depending on your personal tendencies and the account type, look out for fees like:

  • Maintenance fees. Monthly maintenance fees can range from $0 to $25 per month. Some account types waive them if you adhere to the minimum balance requirement or have direct deposit. A few have no maintenance fees at all.
  • Overdraft fees. Banks charge overdraft fees or nonsufficient (NFS) funds fees when you spend more than you have in your account. Overdraft fees can be particularly costly at around $35 per transaction. Some banks, especially neobanks, don’t charge them. However, those banks may block spending when you don’t have enough.
  • ATM fees. Both your own bank and other banks charge ATM fees when you use an out-of-network machine. They can be as much as $2 or $3, meaning a single transaction at an out-of-network ATM could cost you $5 or $6 if both parties charge. Look for a bank with a large network of fee-free ATMs, or consider an online bank that reimburses ATM fees.
  • Foreign transaction fees. If you don’t travel internationally, you don’t have to worry about these. Banks charge them for using your debit card outside the United States. Foreign transaction fees generally range from 1% to 3% of the transaction amount, though some banks go higher and others have no foreign transaction fees. 

Look for a bank with transparent fees and no hidden charges, and consider your own banking habits to choose the account that’s best for you.

Account Features: Interest Rates, Rewards Programs, & Account Minimums

The account features a bank offers can make a significant impact on your banking experience. Common account features to consider include:

  • Interest rates. The interest rate on your account determines how much you’ll earn on your deposits. Most banks only offer interest on certain savings accounts or savings subaccounts. If you’re looking for an account like that, look for a bank that offers competitive interest rates that help your money grow over time.
  • Rewards programs. It’s not terribly common, but some banks offer rewards programs that give you cash back, points, or miles for using your debit card. Look for a bank with a rewards program that fits your spending habits and offers rewards you’ll actually use.
  • Account minimums. Some banks require a minimum balance to open an account or avoid account fees. Check the minimum balance requirements before opening an account, and consider whether you can meet them.
  • Special considerations. Some banks give existing customers special considerations when they open other account types. For example, you might get better rates on a loan, higher interest on a savings account, or extras on your kid’s bank account. Ask about these types of bonuses before opening an account.

Look for a bank with the features that fit your lifestyle and help you achieve your financial objectives.

Technology: Online Portal & Mobile Banking Features

In a time not-so-long ago in a land right underneath us, the info in this section would have been a mere bullet point in the previous one. But the pandemic pushed those of us who are a tad older than Gen Z to acquiesce to the digital revolution if we hadn’t already.  

Since then, the closest I’ve been to a human bank teller is unwittingly passing one in the produce section of the grocery store (I assume). If you’re like me and prefer to stay out of brick-and-mortar banks or just want to preserve your non-corporeal options, online and mobile banking features are a must.

Unless you also hate technology, run the other way from any bank without an app and online portal. If they don’t have them, you can expect them to be similarly behind the times on other things. I bank with a really massive bank, and their app was — I kid you not — just a link to their mobile website rather than a real stand-alone app for way longer than it should have been. And they literally just stopped charging overdraft fees to keep up with neobanks.

Look for a bank with a user-friendly online portal that makes it easy to check balances, transfer funds, pay bills, and view statements. You also need a powerful mobile app with the same features plus mobile check deposit.

But you don’t have to stop there.

Some banks offer additional app-only features that can help you manage your finances and achieve your goals. For example, roundup savings is a feature that automatically rounds up your purchases to the nearest dollar and deposits the difference into a savings account, helping you save without even thinking about it. And savings goals, which online banks may call buckets or envelopes, allow you to set savings goals and track your progress without opening separate savings accounts for each goal.

You’re most likely to get advanced app-only features from online-only neobanks. But you may find these features at traditional or regional banks too.

Make a list of the types of online and mobile features you use and double-check that the bank you choose has an app for that.

The more it matters to you, the more research you have to do. For example, you can look for app or portal walk-throughs on YouTube and check out screenshots on their website or app download page.

Safety & Security: Fraud Protection & Security Measures

When it comes to banking, safety and security are of the utmost importance. You wouldn’t use a bank that was dimly lit and secluded during the hours you needed it. By the same token, you want to ensure your money and personal information are protected at all times. 

Look for a bank that offers two-factor authentication, which adds an extra layer of security by requiring a code in addition to your password to access your account. Also, look for a bank that provides alerts for suspicious activity, such as transactions from an unusual location or unusually large transactions. Some banks may also offer identity theft protection services to help you monitor your credit and detect any fraudulent activity.

It’s also important to consider the bank’s overall security measures, including encryption and firewalls to protect your data from hackers. Check that the bank you choose has a robust security policy and that they’re Federal Deposit Insurance Corporation-insured, which protects your deposits up to $250,000.

Getting Help: Customer Service & Support

No matter how user-friendly a bank’s online portal and mobile app are, there may come a time when you need help from a real person. That’s when it’s important to know what customer service and support options are available.

Ideally, look for a bank that offers 24/7 customer support via phone or chat. If that’s not an option, they should at least have support available during hours you’re likely to have time to use it. Some banks also offer support via email or social media. 

Consider the quality of customer service as well, reading reviews and talking to friends and family members who bank with the same institution.

Finding a bank with stellar customer service is especially important if they don’t have great online or mobile banking options. 

Steps to Help You Make a Decision

Choosing a bank can feel overwhelming, but by breaking the process down into manageable steps, you can make a decision that best suits you. 

  1. Identify your banking needs and preferences. Think about the features that are most important to you. Consider your lifestyle and banking habits as well. Make a list of items to research at each bank. 
  2. Research different banks and compare features. Use online resources such as bank websites and banking and review sites like Money Crashers to learn more about different banks and their features. Make a pros and cons list of the banks that seem to offer the features you’re looking for.
  3. Narrow down your options. Use your pros and cons list to narrow down your options and identify the bank that best fits your needs.
  4. Try a bank’s services before committing. Once you’ve identified a bank you’re interested in, try out their services before committing. No, they don’t offer free trials, but you should think of it that way. Open a checking or savings account, and use their online portal and mobile app to see how easy they are to use. Make sure you feel comfortable with the bank’s customer service and security measures as well. Set a reminder on your calendar to reconsider the bank after three months. If you’re not happy, try something else. It’s a bit of a pain, but ultimately, you’ll be glad you didn’t settle.

Final Word

Choosing the right bank can have a significant impact on your financial — and honestly, mental — well being, but it’s important to remember that you’re not married to your bank. If your bank isn’t meeting your needs or expectations, switch to a bank that does.

It’s also worth having multiple bank accounts at different banks for different purposes. For example, you can open a checking account at a local bank for convenient in-person banking and an online savings account at a different bank for higher interest rates.

The most important factors to consider when choosing a bank are your individual needs and priorities. 

Heather Barnett has been an editor and writer for over 20 years, with over a decade committed to the financial services industry. She joined the Money Crashers team in 2020, covering banking and credit content for banking- and credit-weary readers. In her off time, she enjoys baking, binge-watching crime dramas, and doting on her beloved pets.