Your piggy bank is getting full and you have to do something else with your money. Before you break out the hammer, you’ll need to know where you’re going to put your green. Putting it in the wrong place can cost you. You want to choose a bank that suits your needs and offers you something. You’re giving them your money after all. Let’s discuss what to consider when choosing a bank. 

Online Vs. Brick And Mortar

There are some banks that operate completely online. They work the same, housing your money until you need it. They just don’t have physical locations. Cash deposits are more complicated and sometimes require a linked account. However, by eliminating the overhead of physical locations, online banks usually offer fewer fees. Online banking is an option, but some prefer the ability to access a building with live human beings.

Bank Vs. Credit Union

Some prefer one over the other, but it’s really a tradeoff. Banks are for profit while credit unions are not-for-profit. Credit unions are community based while banks are national. You tend to get better interest rates, both on loans and deposits, at credit unions. It might be tempting to say the credit union is an automatic choice. However, large banks with a national presence are better for people who travel, with ATMs being accessible around the world. Large banks also offer more online/mobile access and have more account options.


Fees to watch out for:

  • Monthly maintenance fees
  • Minimum balance fees
  • Overdraft fees
  • Insufficient funds fees

Larger banks are the worst culprits when it comes to fees. They are, however, avoidable in many cases. Chase, for example, will waive their $12 checking account fee as long as you have $500 or more a month in direct deposits. Bank of America waives their $8 savings account maintenance fee if you maintain $500 or link your BOA checking account. There’s no reason to pay fees when there are so many options out there. What fees you’ll pay and how to avoid them should be one of your first questions when opening an account.

Account Options

  • Checking: This account is for paying bills and spending money. This account will see the most activity. Checking accounts come with a debit card and checks. Most people have their pay deposited into checking where they can transfer it or spend it.
  • Savings: This is your nest egg and rainy day money. Money is put into a savings account so it can build up and sit until you desperately need it. Many savings accounts limit the number of withdrawals you can make from them. A decent savings account will come with a higher interest rate than checking accounts.
  • Money market: A money market account is a combination of a checking and savings account. You’ll gain interest (like with savings), but will only be able to make a certain amount of transactions from the account.
  • Certificates of deposit: A CD is money that you put away for a certain length of time, anywhere from three months to two years in some cases. The money will gain more interest than in a savings account but you’ll face a penalty for withdrawing early.

Banks will have options when it comes to types of checking or savings accounts. It’s usually based on your income and projected account activity. Find a bank that suits your personal financial needs. Most people keep a checking account for spending and a savings account for, well, saving. Money market accounts and CDs are still worth looking into and have their own benefits.

Financial Services Offered

Aside from accounts, banks will have other financial services you can take advantage of. These can be:

  • Loans (personal/auto/student): You may need to borrow money at some point in the future. It’s much easier to deal with the same people who handle your money everyday.
  • Mortgages: This is important if you know if you plan to buy a house one day. See what the bank has to offer for prospective homeowners.
  • Brokerage/Retirement Options: It’s never too early to think about retirement. Find out what options the bank can give you about an IRA or investing.
  • Credit Cards: Using a credit card issued by your bank is a great way to reap rewards. Ask what they have to offer before opening your account.

Online/Mobile Access

Online-only banks have a leg up in this department. However, bigger banks are increasingly focusing on their online presence. Look for:  

  • Online/mobile account access
  • Mobile check deposit
  • Person to person transfers
  • Online bill pay
  • Mobile pay
  • Mobile alerts

Choosing a bank is an important decision. You owe it to yourself to be well informed about where you put your money. Know what your financial needs are, do your research, and find a bank that fits them. Avoid fees whenever you can so there are no unnecessary expenses. 

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