Shopping for a new bank is an exciting time. Between big banks, credit unions, and online banking, there are nearly endless options out there. As for which bank is best, it all depends on personal preference. Regardless of what you're looking for, there are a few basic questions you should ask as you shop around.
- How many branches are there?
Even though many people do a majority of their banking online, you'll still have to visit a branch eventually. You may even have to visit a branch to open your account. That's why it's important to figure out how many branches are near you.
This is where big banks have a lot to offer. You will likely find a big bank branch close to most neighborhoods. Smaller banks have plenty of other benefits to offer, but you might have to drive all the way across town to visit a branch in person.
Ask yourself how often you'll need to visit a physical branch and how far you're willing to go when you that time comes.
- Does the bank help cover ATM fees?
If you've found yourself in a situation where you needed cash quick, you know how annoying ATM fees can be. Luckily, lots of banks offer services to help ease that suffering. Usually, this comes in the form of reimbursements. You'll pay the ATM fee upfront, then your bank will credit you for the fee sometime later.
The specifics of the reimbursements vary from bank to bank, so make sure to ask for the details. Some will reimburse you quicker, others will let you reimburse more often per month.
- What is the mobile app like?
For many, mobile apps are the most common way they interact with their bank. Why go across town to your bank, or even across the house to your computer desk, when you can just pull up your bank accounts on your phone? Not all banks put the same amount of resources into their mobile apps, though.
Download the app, and explore it a bit before you get an account. Check user reviews for strengths and weaknesses. Ask the bank how often they update the app to fix bugs.
- What kind of online tools does this bank offer?
This is a similar to question to the mobile app, but there are differences. Banks sometimes offer a wider set of tools on their webpages. Ask what the website offers that the app doesn't.
- How much does this bank value customer service?
This might be a tough one to get a straight answer to. Most banks will tell you that customer service is one of their top priorities, but user reviews can help you separate winners and losers in this category. Spend some time going through reviews, and look for any problems that repeatedly get mentioned.
You should directly ask what your options are for customer service. Ask about numbers, emails, and instant messengers you can use to get in touch with representatives. Also ask about average wait times with each of those methods of communication.
- Are there any recurring account fees?
Some banks will charge you a base fee just to keep an account open with the bank. This fee could be deducted annually, or it could come out of your account every month. It's easy to find a bank that won't charge any sort of fee, but fees aren't necessarily a bad thing. You could be paying a fee in exchange for a service you value, like high-interest returns or zero overdraft fees.
Ask a bank representative if there are any recurring account fees, and if there are, ask them why it's worth it to pay a fee to be with this bank.
- Will I have to maintain an account minimum?
Banks sometimes require customers to keep a minimum amount of money in their bank account. Similar to an account fee, the bank may require a minimum in exchange for better services. It's important to ask what that minimum is before you open the account, otherwise you could have a withdrawal denied by surprise.
- What happens if I trigger an overdraft?
An overdraft is triggered when you make a withdrawal or purchase that's more than the amount you have in your account (like buying a $7 sandwich with a debit card when you only have $5 in your account). Hopefully this isn't a regular occurrence for you, but you'll still want to be aware of what would happen – just in case. Usually, an overdraft comes with a fee.
When discussing this with banks, they'll often bring up overdraft protection. That name is misleading, because it isn't protecting you from overdraft fees. Instead, it protects you from having an overdraft charge declined. You'll still have to pay fees, but you won't get denied at the register when you're making an overdraft purchase.
- How will money transfers work?
All banks should offer some sort of free money transfer option to other accounts within the same bank. However, it's unlikely that everyone you'll ever need to pay will have the same bank as you. When you need to transfer money to someone with a different bank, you'll want to be aware of how to set up a money transfer and any fees associated with it.
- What is the policy for checks and debit cards?
This is banking 101 here, but just in case anyone needs catching up, checks and debit cards let you pay for stuff when you don't have cash on hand. Now that we're all on the same page, you should figure out how much it'll cost to replace a debit card if you lose it (or if your identity gets stolen). You'll also want to know whether the debit card has international transaction fees, in case you ever travel or buy something from an online store that's based in another country.
Even if you never plan on writing a check, you should figure out how much those cost, too. You might need a check to set up a direct deposit at some point.
- Will I receive interest payments for keeping my money with this bank?
This is an important one. Ask the bank how hard your money will work for you when it's sitting in an account. Default bank accounts often have low-interest returns, but there are specialty accounts that aim to boost your earnings. There may be trade-offs, like an annual fee or high account minimums, but if you don't mind meeting those requirements you might as well get the most out of your money.
- What other services does this bank offer?
Setting up multiple accounts with the same bank is more convenient for you, and the bank might reward you for your loyalty. If you're trying to decide between banks, ask what other services they offer. You might be able to open a credit card or brokerage account with the same bank, or start saving for retirement.