For those who are new to banking or starting a small business, choosing a bank can be like picking out toothpaste on your own for the first time. You find yourself with a melee of options. Do you pick whatever your mother used to buy, or do you branch out and try something new? What do you even look for? Picking a bank doesn't have to be that stressful if you focus on a few key priorities.
Important questions to ask when choosing a bank:
1. How do I want to interact with my bank?
Some people want a physical branch or ATM they can access for depositing funds, making withdrawals, asking questions and managing their money. More and more people want strictly online interactions via mobile or online baking, never setting foot inside a physical branch or touching an ATM. Determine the type of relationship you want to have with your bank and go from there. If you want an in-person experience, visit the branch and get a feel for their services and how they treat their customers. If you want an online experience, go to their website, research customer reviews, find ratings on their mobile app and see what types of services they offer.
2. What kind of services does the bank offer?
The most popular services a bank offers are checking (spending) and savings accounts that let you pay bills, send money online, withdraw and deposit cash and cash checks. Some banks charge a fee for this service, others, like WaFd Bank, offer free checking accounts along with additional checking accounts with additional services and perks for a nominal fee.* Banks also offer savings options like certificates of deposit or (CDs) for long-term savings that may be earmarked for a purchase or investment. CDs lock up the funds for a fixed amount of time at a certain rate of return. Money markets are another service and typically offer higher interest rates. Banks also support small businesses with loans, lines of credit, payroll and payment processing and point of sales systems.
3. What is the difference between a national and local bank?
Sometimes this is the key factor when choosing a bank. Both have value and offer services, but local banks can offer the communities they serve a unique advantage. Local and regional banks know their communities and understand the local challenges their communities face. Whereas larger banks might deny your loan or application on site, a local bank may work with you as they know gaining your business will benefit the community at large. Then there's customer service. While you may feel like just another number with a national bank, local and regional banks typically offer more personal service and attention. The main advantage of a national bank is access to ATMs and branches when traveling, but with a little digging, you'll find that most banks participate in an ATM network, like MoneyPass (link) that let you use other banks ATMs without fees.
4. What type of technology and perks do they offer?
These days mobile aps are table stakes for banks of any type. The ability to move cash, pay bills and manage accounts online are a necessity. More savvy banks offer additional services like fraud alerts, identity theft monitoring, cell phone insurance, health and travel discounts, safe deposit boxes and some even offer discounts on movie tickets!
5. What kind of bank are they?
Finally, its good to do some research on the banks values and how they support the community where you live. A Harvard Business School study about corporate social responsibility beliefs and statistics reported that 70% of Americans are motivated to do business with companies that are committed to making the world a better place. Research the banks you are considering and see if they support the local community. Look at their website and social media channels. Do they participate in social impact and community activities? Do they have a foundation or give back to the community? Are they helping local nonprofits and doing business with other locally based community organizations? What do your friends and grandma say about them? Do you feel good about doing business with them? What do you physically see them doing in your community?
In the end, finding the Bank that fits your lifestyle impacts you every day. With a little research and trusting your instincts, you, and your money will land in the right place.
*Free Checking requires $25 dollar to open. Get access to over 40,000 fee free ATMs. Free online and mobile banking plus person-to-person payments. Nonsufficient funds/returned item fees may apply.