Are you in the market for a new bank? No matter the account you need, there are many different qualities to consider when choosing a bank to fit your particular needs. Here are some tips to use when assessing the banks in your area.
What do you need?
Not everyone is the same and needs the same things out of a bank, so properly assessing what your needs and dealbreakers are is absolutely necessary. Are you someone who gets a lot of paper checks? You should look for banks that offer remote deposit through a mobile app. Are you planning on getting a mortgage sometime soon? Maybe you need a bank that offers discounts for using other services. Here are some services some banks offer — are these needs, wants, or irrelevant to you?
• Bank-to-bank transfers
• Text and email alerts
• ATM availability
• Bank hours
• Branch availability
• Investment accounts
• Financial planning
What matters most is the type of account you’re looking for. Not all banks offer all kinds of accounts. Here are some common types of accounts that may fit your needs:
• Checking account: The standard account for funds you will regularly access, usually through the use of a debit card.
• Savings account: This is an account for putting away money you won’t touch until a rainy day. These accounts generate interest (see ‘Understand rates and fees’).
• CD: A certificate of deposit is meant to store your money for a predetermined amount of time, thus locking in your interest rate for the full term. These accounts are best if you don’t need or want quick access to your money and want to avoid a changing interest rate like you might see with a savings account.
• Money market account: Money market accounts are similar to savings accounts, except with generally easier access to your money. You may receive a debit card or paper checks to access these funds.
Understand rates and fees
After you’ve assessed your particular banking needs, it’s important to understand how interest rates and account charges compare across institutions.
If you’re just looking to open a checking account, make sure either the fees to open and maintain the account are low or it’s free to open and maintain. If you’re opening a savings account, you want to look a high annual percentage yield (APY), especially if you’re going to save large amounts of money. This is the annual percentage of profit you’ll earn on the investment. Make sure your interest compounds — in other words, you can earn interest on past accumulated interest — to make the investment even more worthwhile.
When it comes to fees, there are a few that can remain hidden if not completely understood. Depending on your particular needs, it’s important to keep an eye out for how stringent some of these fees are:
• Overdraft fees: If you’re someone who often overdraws from their checking account, you’ll want to find out how much the bank will charge. Overdraft fees can be $30 or $35, but if you can set up overdraft protection, you can avoid these charges or at least accrue smaller ones.
• ATM fees: Most banks will charge you for using an ATM outside of their network. If you’re someone who regularly withdraws cash on the go, make sure you know how large the bank’s ATM network is and how much it’ll cost you to go out of network.
• Excess transaction fees: You can only withdraw from a savings or money market account six times a month — if you go over the limit, you’ll get charged. While some banks have paused these fees due to the coronavirus pandemic, if you worry you’ll be touching your savings account often, know how much it’ll cost you.
• Foreign transaction fees: If you travel abroad regularly for work or pleasure, this is a fee you’ll want to know about. Find out what a bank charges for using your debit card internationally.
This is arguably the most important thing to look for! Make sure your money is protected by only choosing a bank insured by the Federal Deposit Insurance Corporation (FDIC). In the event of your bank failing and closing, FDIC insurance makes sure you’ll be covered — up to $250,000. If you’re working with more than that, it might be wise to open multiple different accounts.
Know what’s best
At the end of the day, the best bank for you is dependent on your specific needs and interests. However, it doesn’t hurt to consider a bank simply because it’s popular — if it works for so many people, chances are it’ll work for you. According to the readers of Georgia Voice, Wells Fargo is gay Atlanta’s best bank (winning the Best Of award in 2017 and 2018), followed by BB&T and Private Bank of Decatur.