Ask the Expert: How to choose the best bank for you
When opening a checking or savings account, security and convenience top the list of must-haves. But how do you know which bank, savings and loan or other choice is the right one for you? There are many different factors to consider, according to...
When opening a checking or savings account, security and convenience top the list of must-haves. But how do you know which bank, savings and loan or other choice is the right one for you? There are many different factors to consider, according to the Minnesota Society of CPAs.
* Security comes first. Your chief concern in selecting a bank will be the safety of the money in your accounts. Most depositors at banks and savings and loans are insured by a government agency called the Federal Deposit Insurance Corp., or FDIC. Because of problems in the banking industry, the FDIC will guarantee each depositor's money up to $250,000 through Dec. 31, 2009. That means your cash will be returned to you, even if your bank fails. Some retirement accounts, including individual retirement accounts, are covered for up to $250,000 per depositor. If you have joint accounts, each depositor's share of the account is protected up to $250,000 until Dec. 31, 2009, and for at least $100,000 thereafter.
* What's the best deal? The next question is which bank offers the best options financially for you. For example, some banks pay interest on some of the money in your checking account. Other banks may offer free checking. The interest that banks pay on savings accounts also will vary, so it's a good idea to compare offers. Consider what kinds of fees each bank charges in different situations, as well, such as charges for using the ATM at your bank or at other institutions.
* Look into services. Also consider which services the bank offers. Does it provide online banking? Direct deposit of your payroll check? Direct bill pay from your account for regular expenses such as your mortgage or utilities? Is there overdraft protection so you can avoid bouncing a check if one of your deposits doesn't clear as quickly as you thought it would? Are safe-deposit boxes available? Ask about other options that are offered. One bank may provide a valuable service you never realized was available.
* How convenient is it? The bank closest to your home or business may not be the best one if it is always crowded when you do your banking. Check, too, to see how many ATMs will be available to you and if they are along your regular routes of travel.