How To Choose The Right Bank For Your Needs

Find out what to look for when choosing a bank, keeping in mind your own personal financial needs.

When looking for a bank, think of it as a shopping experience. You will want to find a bank that offers excellent customer service and the best deal on fees. Before you begin looking, think about the type of services that you will need. It is unlikely that you will find a bank that has the best customer service, the lowest fees and the best returns on savings accounts in one package, but it is possible. Just in case you don't find that perfect bank, though, it is important to determine your banking priorities.

Checking

Most people use their bank first and foremost for their checking accounts. Does the bank charge a monthly fee to have a checking account? Do you have the option of unlimited checking, as opposed to extra fees when you exceed a certain number of checks every month? Also look for amenities such as free checks with your account. Does the bank offer online banking services, and if so, are they free of charge? This can be particularly useful now that online banking easily integrates with financial management products such as Microsoft Money.

How much does the bank charge for overdrafts? To what extent does it provide overdraft protection, that is, covering your checks if you accidentally overestimate your balance? A bank that provides good overdraft protection can save you many fees from returned checks if you should have a crisis, such as your paycheck bouncing. What fee does your bank charge for returned checks? This is important if you receive checks from numerous individuals.

What about ATM's? Does your bank have a sufficient number of them near where you live and work? Does it charge you extra fees for using another bank's ATM? Does your bank also offer a high security bankcard that you can use for purchases instead of checks? What protections does your bank offer if your card is stolen?

Savings

If you decide to open a savings account, or want to put your money in a certificate of deposit or a high yield savings account, find out which bank has the best returns. Also find out what the minimum initial deposit is. If savings is one of your primary goals, this should be the primary reason that you choose your bank. With savings, you do not have to deal with very many fees, and will not have to worry about ATM locations and customer service quite as much. In this scenario, you want to get as much bang for your buck as possible.

Loans

If you are thinking about obtaining a loan in the near future for a car, house or college expenses, check out the bank's rates and compare them to other banks in the area. Even one half of a percentage point can mean the difference of hundreds, if not thousands of dollars when you are repaying the loan.



Customer Service

Closely observe the customer service that you receive when you go into the bank to speak to a banker. Does anyone acknowledge your presence? If you arrive at a busy time, does anyone stop by to apologize or to tell you that it will only be a few minutes longer? Do bank employees encourage you to speak to them directly, or do they prefer that you use their automated services? Some banks may even charge extra for using tellers as opposed to an ATM or online banking.

What is the customer service for after-hours phone banking like? Do you have to press numerous buttons on your telephone's keypad before you get a recording telling you to call back during bank hours, or can you easily become connected with a banker or customer service representative? This is especially important if you experience a lost or stolen bankcard.

It may sound like a small thing, but banks that offer lollypops to your children in the backseat when you use their drive-thru service can make the children look forward to errands, which is no small feat. Coffee and popcorn in the lobby are nice, as well. Smiling tellers are also a delight. Nothing will turn you off of a particular bank than long waits and surly employees who tell you to your face that you should have used their automated phone service. At that point, you may decide that you do not care very much about the monthly fee that a competing bank is charging.

Types of banks

You will be able to choose from the commercial banks, savings and loans and credit unions. All have their advantages and disadvantages. While commercial banks typically charge higher fees, they are also more accessible. Savings and loans may have more of a small-town feel and more personalized service, but they may be located in an out of the way location. Credit unions can be a good choice if you are looking to save money on fees and get good loan rates, as they are not-for-profit institutions. However, with these, you must meet membership requirements, such as working for an educational institution.

Bank shopping can pay off in a big way down the road. After you have been with a bank for several years, the bank is more likely to lend you money, provide a good reference to a mortgager, and work with you in other ways. It is not a good idea to switch back and forth between banks, as you will forfeit these benefits by doing so. By having patience and doing your homework, you will find the bank that is right for you.

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