The start of a new year is the perfect time to review your finances. As you look back over the past year, you might notice a red flag on your bank account — a monthly $10 maintenance fee, a couple of $35 overdraft charges or a savings account that’s earned just a couple of pennies in the past 12 months. These are just some of the ways the bank you choose can hurt your finances.
There are also many ways that your bank can help you avoid costs, effectively manage money and work toward your financial goals, however. The Best Banks survey from GOBankingRates looked at features and offerings from 120 national banks to find the institutions that offer the best deals and services to customers. Here’s how to tell if you’re banking with one of the best — or if you’d be best served by switching banks.
6 Traits of the Best Banks of 2016
In finding the best banks of 2016, this survey identified key attributes that set some financial institutions apart from others. If you’re looking for a better deal from your bank, sign on with an institution that offers the most favorable features — and provides the services and terms that matter to you most. You’ll see your balances grow, pay less in fees and have a better banking experience.
1. Competitive Deposit Rates
Among the Best Banks of 2016, high deposit rates are a given. Whether you want to earn more on savings, checking or with a certificate of deposit, competitive rates can help keep your money more liquid than if you were to invest it, while growing faster than it would earning average dividends.
The best bank rates significantly outperform nationwide averages, according to the survey findings. The rates on these high-yield accounts can earn as much as 23 times more in annual interest compared with typical rates. If you tend to have high balances, a bank with great rates will put that money to work and grow it for you.
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2. Low Fees
Earning interest is a huge benefit, but this can quickly be offset by accounts with fees that can eat up your dividends and even take a bite out of your account balance. This survey looked at monthly maintenance fees charged on checking and savings accounts, as well as nonsufficient funds fees and CD penalties.
The best banks don’t levy such fees, or they keep these fees low and easier to avoid. For instance, 42 percent of national checking accounts carried no monthly fees, and 35 percent of savings accounts were also free of maintenance fees, the Best Banks of 2016 survey found.
With so many banks offering favorable fee structures and free accounts, you don’t have to settle for an account that costs you a significant amount of money. Switching to a low-cost, low-fee account can ensure you keep more money in your accounts.
Related: Best Checking Accounts
3. Low Deposit Requirements
Another feature to look at is the accessibility of accounts in terms of what they require for minimum balance and opening deposit. The best banks keep the threshold for opening an account low — even as low as $0 — which allows more customers to take advantage of these services regardless of their initial balance. The survey found that 15 percent of banks offer checking accounts with no opening deposit requirements, and 20 percent of banks offer the same feature on savings accounts.
Balance requirements are another issue to consider. Many banks that levy a monthly maintenance fee on savings or checking accounts will waive the fee if the depositor maintains a balance at or above a required amount. Better banks will have a lower minimum balance requirement, making it easier to avoid fees even during months when money gets tight.
4. Strong Customer Service
One of the biggest factors that directly affects your experience with a bank is its customer service and convenience. You probably know from firsthand experience whether your bank has satisfactory customer service, but when you’re searching for a new bank, it can help to look at certain factors to see if it’s a good fit for you.
Independent ratings — like those from BauerFinancial — can be a good indicator of the customer satisfaction and experience the bank typically provides. Other factors to consider are whether the bank’s customer service center is easy to reach through a live chat option on its website or through a 24/7 phone service. The survey found that only 20 percent of national banks have a 24/7 customer support hotline.
5. Convenience and Accessibility
A fifth factor to look at when deciding if a bank is a good deal is how convenient it is to access and manage your money. For example, a large number of branches and ATMs will make it easier to conduct banking business and will also help you avoid ATM fees, check-cashing fees and other costs. Banks with strong digital and online tools can also make it easier to manage and access your money, such as with remote check deposit — which two-thirds of banks offer — and mobile banking.
6. Broad Product Offerings
A recent GOBankingRates survey found that a majority (54 percent) of Americans have an account with just one bank. Most people will turn to their primary bank for all their financial needs, which makes it important to ensure the bank offers all of the products and services they plan to use.
One in five national banks, for example, lack a credit card offering. If having easy access to credit and the ability to earn rewards is important to you, consider picking a bank among the 80 percent with a credit card option. If you plan to keep your money and services with a single institution, you should make sure it is able to meet all of your needs, from borrowing for a car or home to investing for retirement or your child’s college education.