Are you one of the millions of Americans who are frustrated by your bank? Everything from high account fees to a paucity of great customer service, we can get irked from time to time.
Last year, the Federal Deposit Insurance Corporation (FDIC) reported that the number of unbanked households – those who do not have an account at a financial institution – in the United States declined to a record low to seven percent. This means that there are still approximately nine to 10 million Americans without a checking or saving account.
The number of underbanked – those with a bank account but primarily rely on alternative financial services for money orders, payday loans and check cashing – has remained stagnant at around 20 percent. And this decision can cost those consumers a hefty sum of money per month.
What is the motivating factor to conducting financial chores and transactions outside of the banking system on a regular basis? The FDIC cited consumers not having enough money, concerns about security and privacy, language barriers and exorbitant banking fees.
If you are one of those unbanked or underbanked then perhaps it is time to make a drastic change. As we enter into a New Year, perhaps now is the opportunity to find the right bank for your personal use. Even if you are one of the millions who already has a traditional bank account, maybe you can make a change today and find a branch that suits your needs.
Searching for the Right Bank Account
So, how exactly can you find the right personal bank account for your day-to-day needs?
Let’s take a look at five important factors for selecting the best bank for you:
Location of the Bank
When you want to withdraw or deposit money, pay a bill or speak with a customer service representative about opening up a mutual fund account, do you really want to travel 30 minutes to an hour from your home in order to do so? Not really. In fact, nobody ever wants to do this.
As you’re searching for the right bank, you should seek out a branch that is within a reasonable distance. What you should certainly do is try to look for a bank that is within walking distance.
Otherwise, if you refrain from doing this then you could be tempted to utilize an out-of-network ATM and then pay all sorts of fees just to access your money. It’s best to simply open a bank account that is in your neighborhood rather than one that is near your work or half an hour away.
For 10 consecutive years, ATM fees have surged, says an October 2016 report from Bankrate.com. Today, the average use of an out-of-network ATM will cost you around $5.
Some banks have branches all over the city, while some banks may have one every 25 blocks. If you are a consumer who likes to pay for transactions with cash or who likes to have cash in your wallet at all times then the ATM availability can be a big deal. You should find a bank that has a liberal amount of ATMs in your respective city.
Working Hours of a Bank
Years ago, customers were frustrated by the lack of flexible operating hours. In the years since, financial institutions, in the plight to appease the customer, have extended their working hours. Of course, there are still several banks that have limited 9 a.m. to 5 p.m. hours, which doesn’t help someone who works during those same hours.
Simply put: you must find a bank that suits your schedule and not the other way around.
Does it Have Great Customer Service?
Despite our constant gripes about customer service from the big banks, studies have found that the major banks have really improved their customer service support, whether it’s at a branch, on the phone or online.
According to the J.D. Power 2016 U.S. Retail Banking Satisfaction Study, TD Bank, U.S. Bank and Trustmark National Bank are some of the banks with the best customer service in America today.
For many consumers, customer service can make or break your decision to use that bank. Depending on your needs, you should really research on what your prospective bank’s customer service is really like, which can be achieved by checking out customer reviews or reading news reports that cite industry studies.
The Rise of Online Banking
A majority of us use online banking, whether it’s on our desktop computers or mobile devices. We perform much of our financial business online: paying bills, buying mutual funds, trading stocks, purchasing a product or transferring funds to another account.
It is because banks, which have listened to consumer feedback, have invested a lot in their technology systems that we are able to complete these types of transactions.
Are you someone who does a lot of their banking matters online? If so, you should really perform the necessary research and due diligence in order to find out just how good or bad a particular bank’s online system is. Again, you can read online reviews or test out the website yourself (look for things like user experience, features, security and so on).
Can Credit Unions be Used Instead of Banks?
During your crusade to find the right personal bank account, you will often come across credit unions. You have heard all about credit unions for years, which has likely been full of praise.
So, what exactly is a credit union? Well, a credit union is similar to a traditional bank because they both offer checking and savings accounts, credit cards, loan products and CDs. There are more than 6,000 credit unions in the U.S., and, according to the Credit Union National Association (CUNA), 3.7 million consumers joined a credit union in 2015, a record high.
Here are some of the differences between a credit union and a bank:
- A credit union is a not-for-profit organization.
- Credit unions offer high interest rates on savings accounts and low rates on credit cards.
- All credit unions are member-focused institutions, or a cooperative, which means it is owned and operated by its members.
- Your first membership deposit makes you a partial owner of the credit union.
Here are some important facts about credit unions that you should know beforehand:
- Credit unions have some of the best customer service in the finance industry.
- Membership is limited so you can’t just open an account at any credit union. They target specific associations, employee groups, areas and religious affiliations.
- Since credit unions don’t charge high interest rates, their rewards are a lot lower.
- Bank accounts are very simple: they don’t have many features but there are no strings attached.
- Due to new rules and regulations, fees charged by credit unions are going up.
With this knowledge in mind, you can make the right choice between a credit union and a bank.
How to Choose the Right Bank
After looking for locations and hours of operation, you may have a handful of brands at your disposal. The next step is how to actually choose the right bank for you and your family.
It is important to note that banks offer a wide variety of checking accounts with an array of bells and whistles, fees, incentives and features for all types of customers (students, seniors, business owners and the list goes on).
As you target one or two specific banks, there are five aspects that you should concentrate on:
The Monthly Fees
Let’s face it: we hate monthly fees that the banks charge us. The fees do vary based on the account and your personal needs: the number of transactions made each month, overdraft charges, checkbooks and a number of other aspects. You need to determine what fees you’re comfortable paying and what options match your lifestyle.
Fee-free Bank Accounts
Believe it or not, if you have a bank account then you could avoid paying a fee. It’s true. Of course, there is a caveat: maintain a minimum balance month to month. If you have the required minimum balance for your specific account then you don’t have to pay that monthly fee.
Some bank accounts provide the customer certain incentives: exclusive credit cards, discounted interest rates, overdrafts to ensure you don’t get charged by the bank or payable interest on your balance.
Accounts for Specific Uses
In today’s marketplace, there are all sorts of consumers. This is why financial institutions have established different accounts for different uses. Whether you’re a student, a senior citizen, a parent or an entrepreneur, banks can work with you to find the right account for your needs.
Banks will have accounts that come with extra features for a few dollars more, which are known as packaged accounts. Some of the features can consist of special offers, insurance coverage, additional services, loans at special rates and so on.
Let’s be honest: no matter how tempting it may be, you can’t just park your money under your mattress. We live in far different times.
It has never been a better time for consumers to open a bank account. Banks are doing everything they can to ensure that the unbanked become banked at their respective institution. With immense competition in the banking industry, the branches will attempt to sway you with perks, benefits, features and many other elements that can encourage you to bank with them.
Indeed, the ball is in your court and you have numerous banking options to choose from. Everything from credit unions to Internet banking, from traditional banks to smaller community banks, you have so much choose to from. It all depends on finding the right bank for your personal use.
Whether you’re one of the unbanked or someone looking for a change, you have a platter of choice in the field of banking.