Choosing a new bank can feel daunting since many of us have strong emotions related to money and financial security.
The challenge is even greater if you want to switch banks after years of loyalty to an institution or if you’re looking to open an account with a mobile-only neobank that may not yet have a sterling reputation.
But with today’s technology and insights from industry leaders like Steady, finding the right bank for you can be a breeze. It starts with knowing what you want, narrowing down the best options, and opening an account at the right place and time - with bonuses that sweeten the deal.
Let’s find out how to choose a bank that works for you and makes the process quick and painless.
Important life decisions are more manageable when broken down into a step-by-step process. That’s our exact approach here, with eight steps you can follow in choosing a bank that suits your needs.
Start from the top and don’t rush the process; be sure to use Steady to give you the edge.
Most of the bank selection process will come down to research, so get used to navigating the web and discovering how different banks stack up to one another.
Plenty of independently operated websites give ratings to banks and certain accounts based on key criteria, from features and functionality to mobile-friendliness and customer support.
Also, be sure to read actual user reviews of banks from various sources to get the complete picture rather than just a piece of the story.
Even if a bank seems too good to be true, there is bound to be a negative review out there, and it’s in your best interest to hear all available perspectives.
Rather than browsing banks one by one and reading through all their offerings, it might help to start by looking at specific accounts instead. This automatically narrows down your choices and gets rid of any banks that don’t have the type of account you're looking for.
Checking and savings are the two main types of accounts to consider, and many new hybrid accounts offer the best of both worlds.
If you’re starting fresh on your finance journey, we suggest opening a checking account first and then looking at options for savings, investing, and so on.
Then, of course, you should determine if you want a credit card. Your checking account will be linked to your debit card and will be the account type that handles withdrawals from the bank’s ATM network and physical branches. However, you should also research credit card options, as they may greatly vary from bank to bank.
<b>Determine Your “Must Have” Features
Every bank account must be opened with a specific goal in mind, which will outline which features to prioritize in your search.
A checking account, for instance, should help facilitate quick purchases, stay on top of bills, and handle any emergency expenses that come your way. Mobile banking is a must in this era, as it is a transfer feature that makes sending and receiving payments easy.
Your “must-have” features will depend on your lifestyle, how you earn, how you spend, and other factors that only you can determine when browsing account options.
Minimizing fees - or avoiding them altogether - is key to getting the most out of a checking account, so make this part of your mission when finding a bank.
Fees tend to hide around every corner nowadays, so learn what the most common ones are and pinpoint them before you open an unnecessarily costly account.
For instance, banks may charge fees if you don’t make a minimum deposit when opening an account or if you dip beneath a minimum balance requirement while the account is open. You may also encounter overdraft protection features that look good initially but slam you with fees when you least expect it.
Other possible fees to watch out for include:
Banks are obligated to tell you exactly what fees are associated with every account, so it’s up to you to find out the facts before making any commitments. Finding a fee-free or at least low-fee account can be a massive help down the road.
How important are physical bank branches to you, and do you want a neighborhood branch you can rely on? These are key questions to ask if you like a more traditional banking experience because not all banks have branches nowadays.
Some people simply like walking into a regional bank location that feels familiar and gives you a personalized experience. Others are fine with online-only banking that handles all your needs on an app or digital portal - it’s a matter of preference.
Apply the same line of thinking to ATMs, which are arguably more important than bank branches. If your bank doesn’t have a robust network of ATMs you can use on the go, you’ll find yourself paying fees left and right on your journeys.
Banks aren’t the only game in town when exploring financial institutions. Credit unions are a proven alternative with attractive offers, even if they are fewer in number and size than modern banks.
<b>What is the difference between a Credit Union and a Bank?
Credit unions and banks will offer similar products and services, from checking and savings accounts to transfer systems and loans.
Where these institutions differ is in their ownership structure. Credit unions are not-for-profit and aim to maximize benefits for members, while banks are profit-driven and seek to deliver results for shareholders. Credit unions are often local, whereas many banks are national or even international giants — think Bank of America, Citi Bank, and Chase.
This small difference impacts how these organizations operate and the level of service you receive as a customer or member. Credit unions tend to offer better interest rates and more favorable loans, while banks are strict with how they run the numbers and minimize risk.
On the flip side, modern banks are renowned for cutting-edge technology and speedy services, whereas credit unions may be a few steps behind the times. Explore which credit unions operate in your area and weigh the pros and cons for yourself.
Nobody is the same regarding financial needs or lifestyle, and these are two unignorable factors when picking a new bank.
The lifestyle components include small details like purchase volume and frequency, various streams of income, and other applications you use to receive and send cash. Consider how much you travel, how much cash you take out at ATMs, and where you shop.
Big-picture priorities could be your long-term financial goals, from saving for a new car to investing in an education fund for your kids. Look at your lifestyle on a small and large scale to see what matters when browsing account options.
It wasn’t long ago that mobile banking was a newfangled feature only offered by a handful of futuristic banks. Times changed quickly, and now every bank needs a mobile feature set if it wants to compete in the big leagues.
As a customer, you’re given more choice than ever, so dedicate some extra research time to looking at various apps and what they provide. Each app is built slightly differently, with its own strengths and weaknesses to consider.
Keep in mind that this mobile app will be a base camp where you can access key info, track your spending, and organize your personal finances and budgeting as you see fit. The app should be fast, smooth, intuitive, and secure, without any connectivity or privacy concerns.
In addition to an app, your next bank should also offer an online banking portal that you can access from a laptop or desktop. This will allow you to document and print your financial reports more easily and stay organized during times like tax season.
Use your bank’s digital ecosystem to your advantage, and everything falls into place.
By far, the most boring part of the bank selection process is reading the fine print, including terms and conditions that most people usually skip.
Do your best to avoid disputes; know what you’re committing to when opening an account. At the very least, use the resources at Steady to to find better neobanking options that cost less.
Choosing between dozens of banks isn’t a bad problem to have. These banks are competing for you, the customer, which means features and offers are better than ever.
Steady curates the best offers for you, so you can begin the process quickly. Steady even pays you extra cash rewards for completing Boosters, so you can earn extra money for making smarter financial decisions and focus on building a financial strategy for the future.
Use Steady to personalize your neobanking search and acquire key insights along the way. You’ll have the perfect bank in your corner before you know it.
19 Neobanks and What They Offer | NerdWallet
How to Choose a Bank | Ramsey Solutions