How to choose a bank that fits your lifestyle

Whether you’ve just moved to an area that’s considered out of network by your bank, or you’re tired of being surprised by unexpected fees, there’s a lot to think about when you’re in the market for a new bank account. Do you go with a bank or a credit union? Does it matter if they have physical branches? What kinds of fees are easily avoidable?

Let’s lay out all your options and a few key factors to consider when choosing your next bank or credit union account.

1. Think about your current and future product needs

Take a moment to think about your long-term and short-term goals for the future. Do you hope to own a home one day? Maybe you’re tired of feeling financial pressure every time an emergency occurs? Write your list down, and then think about what financial tools are required to help get you there.

It’s also important to think about the products, services and perks that you will need if you travel frequently for work or pleasure. Do the financial institutions you’re considering offer ATM-fee rebates, and if you travel internationally, do ATM-fee rebates apply abroad? Do they have a large, nationwide network of fee-free ATMs? These are all points you’ll want to consider, as they’ll save you tons of money in fees down the road.

Did you know that banks and credit unions have similar products and services? There is a misconception about credit unions that they don’t offer everything a bank can, but that’s simply not true. Many credit unions offer a robust line of products including personal loans, home loans, credit cards, car loans and even investment services!

2. Know all your types of banking options

When you think about banking, are you stuck on the traditional idea of a brick and mortar branch? There are so many different banking options these days, and it’s important that you select a financial institution that makes you feel like your money is secure and easily accessible.

Traditional banks usually have physical branches that you can visit to make deposits, withdraw cash and apply for loans and credit cards. Some of these bigger national banks can run flashy promo deals for checking accounts, but be aware, these promos are usually accompanied with fine print full of the monthly fees you can expect to incur. Many banks are usually insured by the FDIC (Federal Deposit Insurance Corporation), so your funds are protected, should the bank ever file bankruptcy.

Credit unions are a great alternative for people looking to keep more of their hard-earned money and step away from the hefty fees often charged by traditional banks. Credit unions offer the same products and services as banks, but generally with fewer fees, better interest rates and outstanding customer service. Credit unions are usually insured by the NCUA (National Credit Union Administration), so your deposit account funds are protected up to $250,000, just like with FDIC-insured banks.

Lastly, consider a fully-digital online credit union if you’re tech-savvy and prefer to bank from the comfort of your home or on the go. Many people love the security features that online credit unions can offer. Often, these financial institutions are able to devote more time and money to updating their systems with the latest security features so your funds stay protected. They also tend to offer free perks like ATM-fee rebates, contactless debit cards, award-winning mobile apps and larger fee-free ATM networks.

3. Compare account fees and interest rates

The average overdraft fee in the United States is currently up to $33.47! But overdraft fees are just one of the pesky charges people can incur from their savings or checking accounts. In fact, a recent study by the CFPB (Consumer Financial Protection Bureau) states “the average cost of monthly maintenance fees, ATM and account use fees, and overdraft and nonsufficient funds fees for a checking account is nearly $1,000 over a decade.”

You deserve to keep as much of your hard-earned money as you can. So you’ll want to make sure that all your deposit accounts—especially your checking and savings accounts—give you a great interest rate, and have zero monthly services fees. For instance, an Alliant High-Rate Checking account offers an exceptional interest rate (even better than many savings account interest rates) on your funds, and it doesn’t have any sneaky monthly service fees when you sign up for e-statements.

The savings account you choose is also one of the most important tools for reaching your financial goals. You’ll want a liquid account, which means you can easily withdraw your cash when you need it, without racking up early-withdrawal fees or minimum balance fees. Your savings account also needs to offer a great interest rate.

Many credit unions are able to offer much better interest rates on savings accounts and loans compared to traditional banks. This is because credit unions are not-for-profit, meaning that revenue gets returned to the member owners in the form of high savings rates, lower loan rates, and richer credit card rewards.

4. Find a bank that aligns with your values

While you’re shopping around for your next bank account, it’s helpful to have a clear set of values and list of expectations for your next financial institution. In a recent study, 55% of people surveyed said the top reason they would leave a financial institution is because of a fraud claim being handled poorly.

Poor customer service can be a huge (and expensive) pain point when it comes to fraud claims, account accessibility and error resolution. Check to see how the bank or credit union’s mobile app and customer service are rated on Google Play and Apple App Store reviews. You’ll quickly get a feel for the best and the worst experiences members and customers have had.

The very best financial institutions will also offer multiple ways to access your account, in addition to having 24/7 live customer service lines so you can speak to a real human if you need assistance. Inquire about the financial institution’s online and mobile banking, as well as chat features and live assistance.

Lastly, read over the bank or credit union’s philanthropy and mission pages. Do they take a stance on movements that align with your values, and are they making positive impact on their communities? It’s important to know that the people you are trusting with your money also have values that align with your own.

While there’s a lot to consider when choosing a new credit union or bank, you’ll be glad you read the fine print on accounts, and took the time to find a financial institution that is trustworthy and easily accessible.

Looking for more banking tips? Check out these other blog posts:

• How to switch bank accounts seamlessly
• How to decide if mobile banking is right for you
• What to look for in a savings account

Claire Hegstrom is an advocate of the credit union movement through and through. Passionate about financial education, she approaches money conversations from a candid and inclusive space focused on growth and awareness. As our credit union founding father, Ed Filene, once said, “Progress is the constant replacing of the best there is with something still better.” Claire hopes reading Money Mentor will help transform your life from the best to even better.