When considering banks or credit unions, it's crucial to learn about their products and services, ask questions, and make sure you choose the one you trust with your money. You need to consider a few essential aspects to ensure you make a reasonable choice, in the sequence explained below.
What services do you need?
Before you even go to a branch or apply online, you should decide what type of banking experience you're looking for. If you intend to switch to a different financial institution, determine if you want a bank or credit union that offers more robust services and more locations than your current bank. Once you narrow down your options, it's time to visit the branches in person to make sure they are a good fit.
Consider the stability of the financial institution.
To protect your money, the bank or credit union you choose must be insured. If you're interested in a bank, check whether it's insured by the FDIC (Federal Deposit Insurance Corporation). The equivalent institution for a credit union is the NCUA (National Credit Union Association). The agencies supervise financial institutions to make sure they operate safely.
Check the accounts and rates.
When you have shortlisted the financial institutions based on their services, it's time to compare rates. The concept of interest is two-fold. On the one hand, you need to consider how much you get on a deposit account. You will want to choose a bank or credit union with the highest rates. On the other hand, you need to know how much you would pay in case you need to take out a loan. The financial institution with the best ratio between the two is obviously the most optimal choice.
Get informed about the extra perks.
Other than the types of accounts to choose from and interest rates, find out what other services the bank offers. What reward programs do they have? How many ATMs do they have in your area? Do you have a local branch to go to when you have any questions? According to statistics, clients who go to the same branch are more likely to get approved for a loan and obtain better rates.
Consider the fees
A feature that customers often overlook is how much you pay for essential services. To find an account that does not charge you any fees, ask your bank or credit union if it offers a fee-free personal account. Examples of fees to avoid include monthly fees (often around $8 to $10), per check fees ($2 to $3 per item), and fees for using in-branch services (such as copying or printing). Compare the fees different banks offer before you make a final decision.
Above all, choose a bank or credit union based on your needs and preferences to keep costs down and find somewhere convenient to do your banking.