Banking is an integral part of modern life, so you can’t just pick a bank randomly to serve your financial needs. You have to shop around, do a bit of research online and visit potential banks before you make your decision.
Here are some things you need to remember:
1. Look for FDIC insurance. The Federal Deposit Insurance Corporation is a government agency that monitors banks and financial institutions, making sure that they are in good health and that they’re adhering to the law. More importantly, they insure traditional kinds of bank deposit accounts for up to $250,000. These accounts include checking and savings accounts, money market deposit accounts (MMDAs), and certificates of deposit (CDs).
This means your money is absolutely protected even if the bank goes out of business. Since 2009, 473 banks have failed. Most banks are FDIC insured, and they all have signs that say so to assuage depositors. If these signs are not easily visible in the bank you plan to do business with, then you should look for another bank. Either they’re not insured or the people running the place are too stupid to realize the importance of presenting this info.
2. Match the services with your needs. First off, you need to make a list of all your financial needs. Do you need a savings account or a checking account? Will you need a mortgage? Do you want ATM convenience? For small business owners, if you need a reliable source of loans, then you should look at a bank’s lending services first before the deposit services.
But the point here is that you need a bank that provides for all your banking needs. If there’s none available, then you need to prioritize your needs and figure out which services you can do without.
3. Review the fee structure. Since you’re shopping around for banking services, it makes sense to see just how much you’ll have to pay when you choose a particular bank. Different banks have different fee structures, and you need to see just how much it will cost you to use the services you need.
For example, larger banks tend to lose money from overdraft fees, so they make up for it by charging higher account fees for basic checking accounts. But a smaller bank may charge a smaller fee for a checking account because they don’t have this kind of problem.
4. Check the convenience they can give you. The bank should be set up in a way that matches how you do your banking. If you prefer going to a particular bank in person, then that bank should be near your home or your workplace. If you prefer going to an ATM, then that bank should have lots of ATMs all over your area. If you regularly travel all over the country, you need a large bank with locations in the places that you frequent. If you need online banking, then the bank should have this option as well.
Remember, we’re talking about your hard-earned money here. Make sure that the institution you trust your money to deserves that trust, and see if they can offer all the essential things you require.