There are a lot of options when picking a bank. There are local banks, credit unions, nationwide banks, and online banks. If your bank has fees associated with it, a limited online bill pay system, limited ATM access, or any other reason you’re not happy, maybe it’s time to switch. A lot of options exist out there that might be a better fit. But how do you know where to start? What features should you look for?
Start by looking at the fees. Get a bank that has little to no fees associated with it, and stay away from banks with a lot of fees. Larger banks won’t give you the individual attention you might need, and will treat you just like a number. Find out about the customer service for some banks, as you will most likely need to use them at some point for fraudulent charges, etc.
Local banks can be good, but they usually aren’t the best choice, in my opinion. They typically have a limited subset of ATMs that you can use without a fee, and have very limited online bill pay, if anything. The good side to a local bank is that you should expect great customer service.
Credit unions are usually a good choice. They usually have fewer fees, and care about their customers (since you are typically a part owner in a credit union when you sign up for an account). The customer service is usually good, but find out for sure before signing up. They are typically local, but some offer a refund on any ATM fees you would have to pay to a third party ATM. Ask people that live near you what credit union they use, and their experience with them. Find out if they have online bill pay, and try to take a test drive to see how cumbersome it is to use.
Big banks (such as Bank of America) usually have a great online bill pay system, but offer horrendous customer service. I’ve experienced this myself. We were Bank of America customers for years, but when I finally had to utilize the customer service, I fired them. I kept them around for so long because their online bill pay was easy to use, and I already had everything set up in there. When they made me set up my accounts from scratch, and pay for new checks again, I left. They charged fees for a lot of things (checks, overage “protection,” transferring money to a non BoA account, monthly maintenance fees, etc).
I don’t use checks for much, but it’s still nice to have them around. Some online banks (such as Charles Schwab) offer completely free checking accounts. Even the checks are free. You have to have an investment account with their free checking, but that’s not that big of a deal. You can hide the account online if you really want, so you’ll never even see it. You don’t have to have any money in it either, so you can pretend that it doesn’t even exist. There’s no minimum amount that you have to keep in the account, and no monthly maintenance fees. You even get paid a small interest rate each month, as an added bonus. The downside to an online bank is depositing money. Schwab gives you envelopes to mail in a deposit, and you can deposit checks via their mobile app (I love that feature!). Schwab also refunds ATM fees, so you can always get cash if you need it. Capital One 360 has something similar, but I only have a savings account there.
I think our setup is pretty ideal. We have Schwab for our online checking account where we do all of our bill pay and daily transactions, and we have a local credit union that handles our savings account through a high interest checking account. If we need cash, I will use the credit union, and try to use one of their ATMs (although they do refund any ATM fees). I deposit any checks we get through the Schwab mobile app, which is even easier than going to an ATM (since you can deposit checks from your living room in your pajamas if you want). I have envelopes to send a deposit in, but have never used them. I’d probably go deposit the money in my credit union if it’s over their $1000 daily deposit limit on the mobile app, or if the mobile app won’t accept the check for some reason.
When looking to switch banks, make sure you get one with no fees. You should never have to pay any sort of a fee for a bank to hold on to your money. There are just too many options out there that make fees obsolete. Good luck picking out a new bank!