With a huge variety of financial institutions to choose from, it can be difficult to decide which one to pick for your needs. But after considering a few details about your situation and understanding the differences between the available options, choosing a new bank doesn’t have to be an overwhelming task.
Identifying key terms
While it’s easy to refer to them all as “banks,” there are some significant differences in the different types of institutions available, so let’s take a look at the most common options:
- Major banks: If you’re looking for a broad range of services and easy access to an ATM, choosing a major bank is always a popular option.
- Local banks: Although they provide many of the same services as their major counterparts, community banks are known for their more personalized service.
- Credit unions: These are member-owned entities that are not focused on profit, so fees are generally lower and interest rates can be higher than at banks.
- Financial technology (fintech) banks: Many younger or tech-savvy folks gravitate toward these exclusively mobile options.
Deciding which is right
Each of the groups listed above has its own pros and cons, but it’s up to the individual to select the one that he or she believes provides the best balance of convenience, service, and affordability.
Fintech banks often have lower fees, but if you want to visit a brick-and-mortar bank to take care of business then this option is out.
Community banks might offer a friendlier environment, but you could miss out on the convenience of mobile apps provided by larger banking systems.
The good news is that you don’t necessarily have to choose just one. You can always diversify your funds and spread accounts across multiple options, taking advantage of the perks while limiting the drawbacks.