10 Steps To Choosing the Best New Bank Option for You and Your Money
Why do people look for a new bank? Oftentimes, it’s due to a change in life circumstances. But other reasons also apply: to avoid fees, earn more interest, get better rewards and convenience. Many people also look for better customer service; these are just a few of the reasons you might look for a new bank.
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There are more options than ever when it comes to finding the right bank for you. From local banks and credit unions to large, national banks and online-only banks, there is a lot to take into consideration. While that is a good thing, it can also make it tough to choose the right bank. This list will outline the steps you should take in order to find the right bank for you.
1. Research Banks in Your Area (and Beyond)
The first step is to start compiling a list of possible banks. You can start by looking into banks in your area. Smaller banks in your area often provide more personalized customer service than you can find with larger banks. And local banks are not the only option for banking in your area.
It makes sense to start locally, but there are many banks with a regional or even national presence. There are a large number of these banks, so it can seem overwhelming to start researching them on your own. Thankfully, there are lists that can help, such as the GOBankingRates list of the Best Banks of 2023.
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2. Read Reviews and Ask Family and Friends
Reading reviews and asking family and friends is always a good first step when looking for a new bank, said Nicole Watson, SVP/territory delivery director at UMB Bank. Everyone is different, though, so asking those close to you can be useful.
For example, it may be very important to you to have the option to work with someone in person. That’s not as important for everyone, and some people may not mind if support is mostly or entirely online. Thus, taking into account your own preferences is key.
3. Visit the Banks’ Websites
There are few things worse than having to search a website up and down just to find something very basic. Nicole Watson recommended visiting each bank’s website to be sure you like the interface. If it is not intuitive or you find it frustrating to use, consider how much that will affect your daily banking.
Most online banks, of course, have an intuitive website. But if you intend to bank locally, will you do most of your banking online or in person? These are important considerations, especially if the bank’s website is subpar.
4. Does It Have the Products, Services and Benefits You Want?
In continuation of the above step, you can check each bank’s website to see which products it offers. Not every bank offers every product and service; thus, ensuring it offers the ones you want is important. Michael Benninger, banking writer at Finder.com, offered questions that can help you hone in on what each bank offers. “Are you looking for an individual or a joint account? Do you just need a checking and savings account, or do you want access to CDs, IRAs, and money market accounts as well? Do you prefer to do your banking in-person or is online banking better for you? Make a list of the factors you value most.”
Many banks also offer benefits and perks for members. “Increasingly, banks that are evolving with the times offer payment flexibility, meaning they empower their customers to use a variety of payment options when purchasing a product or service,” said Len Covello, CTO of Engage People. “The ability to pay with points is an example of payment flexibility.”
5. Contact the Bank
It is a good idea to contact the bank(s) you are considering before opening a new account. There are a number of questions you can answer by doing so. Nicole Watson gave her input on this, “Contact the bank of interest to understand the relationship they have with their customers and if this aligns with your needs. For example, a big bank could offer convenience, but a smaller bank could offer more personalization.”
In addition, you should consider asking specific questions about the bank’s policies, said Annette Harris of Harris Financial Coaching. Possible questions include:
- Is a direct deposit required?
- Are there ATM fees and if so, do you offer ATM rebates monthly?
- Is a savings account required to have a checking account?
- Is there a minimum balance required for opening and maintaining the account without fees?
6. Find Out If the Bank Is a Trusted Advisor
There is no guarantee that banks and other financial institutions will always work in your best interest. Thus, finding out whether the bank you are considering is a trusted advisor can help you determine if it will be a good relationship. “It’s also important to find out if the bank acts as a trusted advisor and works to build a relationship versus treating customers like a number,” Watson said. “A bank should be a partner that helps you achieve your financial goals and be there for you when you need them.”
7. Research How Each Bank Is Structured
This point is another continuation of the above. Finding out how the bank is structured is another way to find clues about whether it will act in your best interest. For instance, is the bank publicly-owned or privately-owned? Bill Calderara, president and CEO of Ulster Savings Bank, offered his thoughts on this point. “Is the bank publicly owned and thereby has to be concerned with its shareholders first or is a mutual bank a better option for you, which doesn’t have shareholders and are created for the benefit of the customers and communities they serve.”
8. Does It Align With Your Values?
Value-based banking and investing have become more prevalent in recent years, especially as the number of options has increased for consumers. No longer are banks simply a safe place to store your cash. Now, it’s possible to bank according to your values.
For example, some banks lend a large portion of their money to local businesses or invest in affordable housing. Some are choosing not to invest in fossil fuels. Whatever is important to you, consider whether your bank will fight for the issues you care about.
9. Think About Locality
Another thing to think about before opening a new bank account is locality. For example, if you move frequently, a local bank may not be your best option, even if it checks other boxes that are important to you. “If your lifestyle includes moving frequently, which is the case for many military families, a financial institution with mobile banking and branches across the country may be a better fit than a local one,” said Anne Marie Ferdinando, member outreach manager at Navy Federal Credit Union. “If you plan on remaining in your current location for an extended period of time, a local financial institution may be a more feasible option for you.”
10. Read the Fine Print
Reading the fine print is certainly not something we often like to do. How many times have you seen a terms of service document and clicked right past it? This happens frequently, but with banks, that fine print can hide some unsightly fees.
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