All Financial Wisdom

Picking a Bank: Savings and Checking

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Two close people in my life have decided to change banks recently.  They have asked me to help.

I started off asking them what is important for their bank to have.  I received mobile banking, convenient ATMs, and no monthly fees.  With that as a starting place, I searched through a long list of banks and credit  unions and found what differentiates between them.  I put together a short list of criteria when choosing a new bank for your savings and checking accounts.

Criteria when Looking for a New Bank

  • Monthly Fee.
  • Minimum to Keep in the account for no Monthly Fee (I have seen them between $100 and $10,000.)
  • Interest Rate (APY).
  • Minimum Balance to Qualify for Interest.
  • ATMs/Branches near Work.
  • ATMs/Branches near Home.
  • Online Banking and Mobile Apps. (I couldn't find a bank that didn't have one, but I am sure they are out there.)

Using this criteria, it was easy to differentiate between all of different banks and their different Savings and Checking accounts.

Interesting Conclusions

Some things I did notice, there was a lot of monthly fees and in cases where they can be waived, they made it seem like benefit!  I would think the fact that there is a monthly fee would be the nail on the head.  I don't want to worry about a monthly fee, even if I normally would get it waived.  I wouldn't want to have a time of hardship and need of my money and then be worried about the excessive fees I might occur.  "Its my money and I want it now" as they say.

I was surprise on how low the interest rates were for these "savings" accounts.  The banks that I researched had savings interest rates at 0.01%, 0.03%, and 0.05%.  That is disgusting.  Say you keep $10,000 in one of those savings accounts.  You would earn $1, $3, and $5 respectively.  Yikes!  Credit Unions were a little better with savings interest rates at around 0.15%.

There were exceptions though.  CapitalOne's 360 Savings and Ally Savings have 0.75% and 0.99%.  With $10,000 in those accounts for a year, they would have earned $75 and $95 dollars.  They are primarily online and have no physical branches.  CapitalOne has thousands of ATMs spread around the country, while Ally will reimburse you for EVERY ATM fee, so you can use any ATM, whenever.

What are your conclusions, tips, or advice when searching for a new bank?

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