Is Your Bank Right for You?

When it’s time to choose a bank, make sure the bank you choose gives you the products and services you need, the way you want them. There are big banks, smaller regional banks, community banks, credit unions and internet banks. Each has its own strengths and weaknesses and it’s up to you to sift through the hype and fine print so that you end up with a good fit.

People tend to have similar banking needs given their stage of life, marital status and economic situation. Each combination of factors will tend to attract similar financial needs and can quickly indicate what type of bank will suit your situation best.

A young recently graduated single person who is comfortable with very little face-to-face contact might be a good candidate for an internet bank. Most transactions can be done online. More than likely, the individual is at their first job and wants to maximize what little savings that they are able to put away. The interest rates at internet banks are excellent. These banks are generally good with online bill pay so scheduling payments helps avoid early financial black marks.

Common disadvantages of internet bank accounts include drawn out processes for opening accounts and sketchy, inconsistent customer service. Take heart. These banks are very agile and are constantly striving to improve.

A young family with children might need a place that can provide the most different types of service possible. This “one stop shop” approach is the domain of the large national banks like Citibank, Wells Fargo, Bank of America, and Bank One. The advantages here are large ATM networks, excellent online offerings (though they may be more expensive than internet banks) and brick-and-mortar banks that you can visit if you need to do something more complicated.

Although these banks offer many different services, there is one caveat. If you are looking for the best price or best performing service, you may have to shop for them. Other lending institutions offer lower rates on their mortgages for example.

For consumers like retired couples who are looking for more personalized service offerings and a more relaxed environment, smaller regional choices, community banks and credit unions are an attractive alternative to mega banks. The service tends to be more personal and fees are generally lower. They may be more flexible than larger banks as well.

These banks tend to have far fewer ATMs available, especially when you leave that bank’s home region, so if you travel a lot, ATM fees could add up. These banks also tend to be the target of mergers and acquisitions so a bank run by people you know well could end up as another brick in the wall of a mega bank.

Regardless of where you choose, make it a personal goal to understand the fine print of the services that you use most. If you don’t understand something, make the banks customer service attendants explain it to your satisfaction. If you find that a service comes with policies that you disagree with, find out if the bank has something that conforms to what you want.

Is “free checking” really free? Maybe. But maybe only under certain conditions.

Make it a habit to understand how a service or product can help you. Get beyond the marketing double talk and hold the bank to its responsibility to you to help you understand offerings. Regardless of what bank your choose, understand that a bank exists to make money by providing services and products to its customers. Note the emphasis on “Make Money”. Because you are choosing to spend your money and keep your money there, make sure that customer service is up to your standards.