There are seemingly endless options when it comes to banks these days. From traditional banks to online banks, there have never been more places to keep your money. But all banks are not created equal and selecting the wrong bank can come back to bite you right in the wallet. So when the time comes to open a checking account, it’s important to ask the right questions.
In today’s digital world, a mobile app or access to online banking is imperative for many people. While some people prefer to go to the physical bank to do all of their transactions, that is simply not an option for everyone.
If online banking is important to you, be sure to ask how their platform works. What transactions can you do online? Most platforms will allow you to check your balance, pay bills, and deposit checks all from the convenience of your smartphone. There may be limits to the amounts you can deposit or there may be fees charged for each deposit, so these are questions you should ask as well.
Again, some people like to go to the physical bank for all transactions. If this is the case for you, be sure to find out where the banks are located. Some larger transactions may require you to go to the physical location, so you should at least check that there is one within driving distance to you.
While many places are turning cashless these days, some of us still need cash on hand. You will not have to pay a fee if you use your bank’s ATM or an ATM that is in your bank’s network, but you should check where these are located. Also ask what fees you will have to pay for using an out of network ATM. While some online banks have no physical locations, and therefore have no ATMs, they may have a policy that allows you to use certain ATMS with no fee.
A minimum balance may be required to keep certain checking accounts in good standing. These minimum balances may be required daily, weekly, or monthly depending on the bank. If you do not plan to keep a large sum of money in your checking account, try to look for one with no minimum balance. You may be able to have this requirement waived if based on other policies, such as linking your savings account to your checking account. Ask the bank if there are any ways to have the minimum balance requirement waived. Failing to keep the balance will result in fees or the denial of interest payments so you want to keep your account in good standing.
Many banks offer interest rates on checking accounts. These rates are usually low, much lower than the rates for savings accounts. If a bank does offer a high yield checking account there may be a higher minimum balance. But it’s good to shop around for a good interest rate if possible. After all, if your money is just sitting there and can earn some interest, why shouldn’t it?
Banks charge different fees for different things. Here are just a few of the fees you may be required to pay at some point:
Account maintenance fee
Overdraft fee
Minimum balance penalty fee
ATM fee
Return deposit
Transfer fee
Foreign transaction fee
Paper statement fee
Account closure fee
There is usually a list of fees that will be provided to you. Paying attention to what the policies and fees are will help you select a bank that is right for you.
In addition to minimum balances, there may be other requirements that you are required to meet in order to keep your account open and in good standing. Some banks require that you deposit a certain amount every month, have a limit to how many checks you can write, or require a significant balance that you need to deposit to open the account.
If you are a traveler it is imperative to check the foreign transaction policy of your checking account. There is no worse feeling than being in a foreign country with no access to your money. Some banks will allow you to use your card at a foreign ATM and take out the local currency, but this policy and the fees that you are charged will vary from bank to bank.
If travel is a high priority for you, look for a bank that will waive foreign transaction fees. Banks today are trying to become more competitive when it comes to overseas transactions, so you may be able to find some banks with exceptional policies. Charles Schwab offers one of the best international ATM withdrawal policies while Capital One has some of the best deals on foreign transaction fees.
It is not out of the question that something could happen to the bank you select. Given the failure of four banks this year alone, it’s something that you should at least consider. Most banks are insured by the FDIC–the Federal Deposit Insurance Corporation–which will usually insure your money for up to $250,000. If the bank is not insured, take that as a warning sign.
Chances are you will need to contact customer service at some point. It may be for assistance with a simple banking issue or it may be to report an unrecognized transaction. But either way you want to be sure that the customer service is responsive and will work with you. Reading reviews online will give you a sense of how other customers have been treated in the past and can help inform your decision.
Researching banks may not be the most enjoyable thing to do, but taking the time to examine each option can help save you a lot of money and time in the future. You work hard for your money and deserve to keep it somewhere safe and accessible. Your money should not be tied up in a bad bank account, nor should it be tied up in unreasonable car payments. Contact Auto Approve today to find out how refinancing your car loan can save you money!