Finding the Best Bank for Your Needs

Bank accounts aren't one size fits all. Here's how to find the best one for you.

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Finding the Best Bank for Your Needs
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By Kimberly Palmer

Savings and checking accounts come in more sizes and shapes than jeans -- and you want to make sure you find the right fit. We spoke with some of the top banking and money experts to get the latest on how to be savvy when choosing a bank account. Here are six of their top tips:

Know your options -- and yourself. In general, says Today Show financial editor Jean Chatzky, larger banks offer more ATMs and lower interest rates on savings accounts, while smaller banks might be less convenient but offer lower fees. Meanwhile, online-only banks might be able to offer higher interest rates, but lack the brick-and-mortar presence, and credit unions often offer lower fees but can have more restrictions such as when you can speak to a customer service representative or visit a teller.

"The question you have to ask as a consumer, is, 'How do I use my bank?' " Chatzky says. For example: "Do I care if there's a teller? Do I want to be able to walk in and talk to somebody? How often will I use an ATM, and do I care if there's not one where I live and one where I work?" She recommends the comparison tool findabetterbank.com, which makes it easy to search by ZIP code. Other websites, including bankrate.com and Google Advisor, also offer free customized searches.

Focus on your checking account first. "Your checking account is the centerpiece," says Greg McBride, senior financial analyst at bankrate.com. "You can always have a savings account elsewhere, and then link it to your checking account."

Free checking accounts are still relatively easy to find,
although most banks will charge for extra products and services such as a safety deposit box, bounced checks and withdrawals outside its ATM network. "If you find a free checking account, the only way it will cost you money is if you have sloppy financial habits," McBride says.

Keep your eyes peeled for letters from your bank. That's how banks let you know about any changes to their policies that will affect your accounts, says "The 10 Commandments of Money" author Liz Pulliam Weston. "Those can be easy to miss, though, so it's not a bad idea to simply call your bank and ask if any new fees are about to apply to your accounts," she says. If new fees are avoidable, such as a charge imposed if your account drops below a minimum balance, perhaps you can put more money into your account or close it altogether.

Don't forget about credit unions. "They are truly local, unlike so many of the other 'too big to fail' banks, and are deeply invested in the communities they serve," says Jude Boudreaux, a certified financial planner in New Orleans.

Consider your travel schedule. If you travel a lot for work and need a bank with branches throughout the country, you probably want to skip the local community bank and go with a big one, even if it means incurring a few more fees, says Farnoosh Torabi, author of "Psych Yourself Rich." On the other hand, if you don't rely much on ATMs, and the local teller can fill all your needs, a local bank or credit union could work better for you. "The bank's customer service may be unavailable after business hours, but in exchange you may face lower fees," she says.

Stay on top of your own account. When special education teacher Danny Kofke, author of "A Simple Book of Financial Wisdom," got hit with a late fee on a credit card payment, he immediately called his bank, a national chain, and explained that he accidentally forgot to pay the bill. The customer service representative immediately agreed to waive the fee, partly because Kofke is a good customer with a strong history of on-time payments and multiple accounts with the bank. "I know I could probably shop around and get better rewards on my credit card, but since we don't have any debt except our mortgage, I find just working with one bank much easier to keep track of," he says.

Chatzky adds that people who bank online tend to look at their accounts four times more often than those who bank the old-fashioned way, and frequent check-ins can help spot any potential identify theft as well as prevent overdrawing an account.

The bottom line: Your banking needs are unique, so take time to think about what's most important to you, then find the bank that offers it. You can probably avoid paying most fees, as long as you stay on top of your account.


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5 Comments

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Denise

My family uses the 2 best banks there are: Northern Trust and Finemark.

December 27 2013 at 4:43 PM Report abuse rate up rate down Reply
oureverydaymoney

Finding the right bank or credit union is not always about finding the one with the best and most convenient services. In fact, I often suggest that we each have a very INCONVENIENT savings account at an institution not connected to our main checking account. Use this inconvenient account as a savings tool by setting up a direct deposit from work or an automatic bill pay from our checking account into this new account. Then, if we've found a bank or credit union that only has one branch within a 50 mile radius, has no drive-thru, no Saturday or evening hours, and no ATM card (we can decline this one), then withdrawing money from that savings had better be for a darn good reason. This helps "savings raiders" like myself minimize savings dipping for impulse purchases.

While I'm a credit union fan, I also know there are some great banks out there doing right by their customers. In either case, sometimes there's a trade off between big with lots of services/options and small with personalize services. However, there are some that can mix both quite well.

Thanks for the post (and the comments)!

Todd
Author of "Everyday Money for Everyday People"

December 20 2013 at 2:11 PM Report abuse rate up rate down Reply
Valerie

I have a friend who works as a banking VP. Her advice: avoid any type of online banking like the plague. Horror stories abound about these so-called "safe" internet transactions. (And, yes, she has her own financial accounts in traditional "bricks and boards" institutions.)

However, if you really think it's "cool" to do everything on the net, including having your bank account(s) there ---her advice is to form the habit of checking your account(s) every day. (NOT just a few times a week.) Bad stuff happens FAST on the net. It can also be a real tangled-up nightmare to sort out.

Personally, I also think it's a good idea to have a second back-up checking account (in a different location than your first account). Preferably in a credit union. Not just one bank checking account -- as the self-appointed "financial experts" in the Daily Finance article think is adequate. Only takes a few minutes, each month, to balance accounts. And that second account is a good safeguard.

December 18 2013 at 2:37 PM Report abuse rate up rate down Reply
BLUEWHITEMARBLE

do not support the fatcats banks--take take ur money, and is just like stealing with the support and the blessing of our federal government---credi cards a big-rip-off---,wal.street--- a rip-off-they rip-u-off 24---7---365 \'it is a cut-troat business\" old man jpmorgan quote----just put ur money in yr local CREDIT UNION----AMERICANS MUST BEGIN TO WISE-UP---STARVE THE AMERICAN IMPERIALIST CAPITALISM-- ther america taxpayers were used and abused by the government and clandestinely bail-out these- CON ARTISTS- DURING LITTLE BUSH JR MAYHEM IN OFFICE--avoid them like the plague---thank you---bluewhitemarble/czmars

December 18 2013 at 9:22 AM Report abuse rate up rate down Reply
madfam004

I found that Credit Unions are the best because since they are smaller you are treated better than just a number.

December 18 2013 at 7:03 AM Report abuse +2 rate up rate down Reply
Tom Harrell

I found the Best one for me. I call it the NO Bank or the UN Bank------------More commonly known as the "CREDIT UNION" -------------Better Rates, Better Service, Treated like a Human Being instead of a Cash COW.----------They "PAY ME" for my checking account (if I maintain a certain balance). Do ya think a BANK would Pay me for a Checking Account ? ? ?---------------YEA, when Pigs Fly.

December 18 2013 at 7:03 AM Report abuse -1 rate up rate down Reply