How to choose a bank

In the market for a place to put your money? There are several important things to consider when deciding where to place your cash.

Mark Lennihan/AP/File
A Wall Street street sign marks the intersection outside the New York Stock Exchange.

The search for a place to put your money can be confusing, especially when every bank and credit union offers different features. Your bank should fit your life, whether you’re a student, a working professional with a family, or a senior on the brink of retirement.

So how do you choose? Evaluating your financial needs and priorities will be essential to finding the best bank for you, whether this is your first search or you’re looking to change.

What questions to ask

There are four primary types of financial institutions to put your money: banks, credit unions, community banks and online-only banks. Before jumping into one, though, ask yourself some fundamental questions so that you get the best banking experience for your needs and goals.

Does it have the account(s) I want?

This will depend on personal taste. Some people want to keep their money in one place, for convenience’s sake. If you are one of them, check how much you would be able to do: Checking? Savings? Credit cards? Home and auto loans? Retirement accounts? Small-business services? Financial planning? Other people would spread out their money to get the most out of it. If that’s you, explore what each account has to offer and think about how you will keep your accounts organized. There’s no limit to how many accounts you may have at different banks or credit unions, so feel free to personalize your finances according to your needs.

The quick answer: A bigger national bank is more apt to have a full suite of accounts available, but the ability to mix and match across institutions is greater than ever.

What are the rates and fees?

Think of this as a cost to store and use your money in an account, and a reward for the amount you deposit. Learn about all the fees the institution might charge for monthly maintenance, ATM use, overdrafts, transferring money between accounts, receiving paper statements — the list at some places can go on and on. And find out the interest rates you’d pay on credit cards and loans, and those you would earn on deposit accounts. Banks and credit unions publish their rates and fee schedules on their websites. If you can’t find them, ask.

The quick answer: In general, credit unions, as nonprofit, member-owned institutions, have higher annual percentage yields on deposit accounts and lower fees than banks. And online-only banks often have even better terms because they don’t have the cost of keeping physical branch locations.

Do I need a bank close to home?

Think about your lifestyle and how you prefer to conduct your financial business. Do you want to talk with a person face to face, or are you more comfortable on your computer or phone? Do you travel a lot and need to be able to withdraw cash wherever you are? Depending on your answers, look at the number and location of brick-and-mortar branches an institution maintains, its ATM network (whether all its own or as part of a shared nationwide network) and its online and mobile offerings.

The quick answer: National banks will have more branches across the country. Credit unions that are part of networks such as Allpoint and Star will have the greatest ATM coverage. And, of course, online institutions are available anywhere with a connection.

Is my money safe?

You have insurance to protect your health, your car, your home — and you should for your cash, too. When looking at banks or credit unions, make sure your deposits will be insured. For banks, that means backing by the Federal Deposit Insurance Corporation; for credit unions, it’s the National Credit Union Administration. Both are federal agencies that will insure your balances at that institution up to $250,000 if your bank or credit union fails. (Note that this protection is per bank, not per account, so if your funds exceed that amount, consider setting up deposit accounts across different banks or credit unions so that the amounts are each insured separately up to $250,000.)

The quick answer: FDIC and NCUA insurance are functionally the same, so as long as the financial institution has it, you’re in good shape.

Next steps

Choosing the right bank is personal. After you’ve decided what matters to you, examine your options. Check out the bank or credit union’s website, visit a branch, and ask family or friends if they have any favorites. All of these will help you narrow your choices.

This article first appeared at NerdWallet.

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