What to look for in a bank? It’s a personal decision with many considerations, including your lifestyle and financial goals.
Choosing a bank can feel overwhelming, especially since you’ll be trusting that institution with your private personal information and valuable assets. If you’re shopping around, this guide can make it easier to identify what to look for in a bank and how to choose the right bank with the best options for your financial needs.
Identify the type of account you need
The first step in choosing a bank is determining what kind of account(s) you want to open. These might include:
- Checking account
- Savings account
- Money market account (MMA)
- Certificate of deposit (CD)
It’s important to first consider your everyday and long-term financial needs and how you manage your money. For example, you may want a money market account and a checking account to manage your daily spending and longer-term savings. Not all banks have MMAs, though, so if you want the convenience of having both account types at the same bank, you’ll need to choose accordingly.
Look for low (or no) fees
Many banks offer no-fee checking accounts and are your best option for eliminating unnecessary fees. Some accounts take the no-fee angle even further, with no charges for overdrafts, check reorders, insufficient funds, or ATM withdrawals. (Take a look at the Discover® Checking Account to see what we mean.)
On the other hand, some banks may waive fees if you meet certain requirements. This might mean maintaining a certain average daily balance, initiating a minimum number of monthly transactions, receiving a certain amount via direct deposit, or even maintaining a different account (such as a mortgage or an investment portfolio) with the same institution.
Compare local versus online options
Some people prefer banking in person, while others don’t mind conducting transactions through a mobile app, online, or over the phone. There’s no right answer; just consider whether online banking or banking at a branch is better for you.
- Online banks may offer lower fees, higher interest rates, and better features. Because these institutions have a lower overhead, many savings and benefits get passed on to customers.
- While online banking is simple and intuitive—and available 24/7—some customers feel more comfortable with face-to-face interactions. In these cases, brick-and-mortar banking may be a better solution.
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Examine convenience and security features
As you wonder, “What bank should I choose?” consider the most important features to you, then find the bank that matches.
- Do you prefer cutting-edge technology? Because online institutions operate on a web-based model, they may roll out new features and products quicker than traditional banks.
- How do you need to deposit and withdraw funds? If you regularly deposit cash or large checks, you may prefer a bank with in-person services. On the other hand, an online bank may provide everything you need between mobile check deposits and automated clearing house (ACH, the system through which funds are electronically deposited in financial institutions) transfers.
- Do you need specific features as a safety net? Many banks offer overdraft protection, and some may even provide it for free. Other features like early paycheck access, no-fee paper checks, and online bill pay are also worth consideration.
Tip: Discover and most other banks are Federal Deposit Insurance Corporation (FDIC) members, but always verify that your assets will be insured by this independent government agency (and avoid banks that aren’t FDIC-insured).
Read reviews
Finding out about a bank’s products and services gives you an important starting point, but hearing from consumers who use those products can be invaluable when deciding. Ask your friends and family and read online reviews to make sure there are no red flags about how a bank treats its customers.
Check out the terms and conditions
Lastly, look at specific terms or special features to determine the right account match for your needs. If the interest rate is conditional based on the account balance or is a promotional rate offered for a limited time for new customers, you’ll need to keep that in mind, too.
How to choose the right bank
Choosing a new bank is a big decision with far-reaching impact. If you learn how to choose a bank well, you can potentially save more, spend less, and even make more significant progress toward your money goals. Evaluating what you need from your bank and accounts helps you narrow the list and make a more confident decision.
Discover offers checking, savings, money market, CD, IRA savings, and IRA CD accounts for all your needs, from a name you know. Learn more today.
Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsem*nt, or verification regarding the third-party or information.
