How to Choose a Bank

How did you choose your current bank? Was it the closest to your house? Did your parents have an account there? I chose my first bank when I was 16 because of the freebie being given away when I opened a checking account. I kept that same bank until I was 25.

I didn’t make an educated decision about the bank I was going to use until my husband and I were opening a joint account. By then my passion for personal finance had fully blossomed and I had more knowledge of what one should look for in a bank. If you are considering opening a new account or are curious about what is out there, please be sure to keep the following things in mind during your search.

Interest Rates

Banks are notorious for not having stellar interest rates on their checking/savings accounts. On average, brick and mortar banks offer less than .10% interest rate. The inflation rate averages 2% a year so you do the math. Online banks typically are able to provide more on the interest rates that are more in line with the inflation rate.

If online banks aren’t your thing, be sure to compare the interest rates from different brick and mortar banks. Higher interest rates won’t necessarily make you rich, but if you could get a little more money without any work on your part, why not go for it?

You also want to see if they offer competitive rates on loans that you may need.

Fees

Thankfully, I’ve always been cognizant (or lucky) enough to never have an overdraft fee. Don’t get me wrong, I’ve definitely had less than $5 in my account before, but I was aware of it and didn’t have to use more before my next payday. I’ve known people that had to go through that and needless to say, fees aren’t fun.

Dive into the meticulous small print and see what you will be charged for. Some banks charge a monthly maintenance fee just for having an account. It’s better to spend time up front discovering that you can’t transfer money from your savings as often as you thought instead of paying for it later. ATM fees can be costly as well so the next criteria can be very important.

Convenience

It should be convenient to have a bank account. Do they have an app that is easy to use? Do they offer mobile deposits? Can you quickly access your funds? Is it easy to get a new debit card if you lose yours? Are there ATMs available in your area? Is there free overdraft protection? You can’t blindly choose a bank based off of numbers alone; accessibility and convenience is just as important.

Reputation

Let’s say you’ve researched the numbers, looked into where there are branches and ATMs available to you, and now you’ve narrowed down your choices. Just like choosing what restaurant to eat at, I suggest looking up reviews for the banks. When dealing with something as important as your money, you don’t want to deal with lousy customer service. You also want to choose a bank offers great services and educate you on increasing your credit score, budgeting, etc.

After analyzing all of these points, my husband and I chose to go with a Navy Federal Credit Union. It was the brick and mortar with the highest interest rates, the least amount of fees, branches close to our area with access to use any ATM due to their fee reimbursement policy, and they offer great customer service. Not only that, but on their mobile app they publish articles that educate their members on various financial topics. We’ve been very satisfied with their service and would definitely recommend other military families consider them as well.

Even though I love Navy Federal, I suggest you do the research for yourself. What works for us may not be the best option in your area. Even if you have been with a bank for a while, just take a look at what other banks have to offer. You may be surprised at where your bank ranks in the categories laid out above.