4 Questions to Ask When Picking Your First (or Next) Bank

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Do you remember when you opened your first bank account? I do.

I remember the time my mom helped me open my very first savings account at Wells Fargo. My initial deposit was around $100, which I had saved up from my eighth birthday. I was always so excited to receive the bank statements and, even though it was only a few cents, I enjoyed watching my money slowly grow each month.

As I got older, I began using different banks and credit unions. My father served in the U.S. Navy; while I was a dependent, he insisted I open accounts with financial institutions that most civilians are not able to access. When I went to college, I closed out my Wells Fargo account and transferred everything into another big bank checking account. This was simply a matter of convenience — they had several ATMs on campus and a branch within walking distance of my apartment.

Resource: Best Savings Accounts for Children

Most people that I know have done the same thing. They have either chosen to use a bank (or credit union) that a family member or friend recommended, or chosen one solely on convenience. But, I have seen the transformation of the banking experience shift from the teller, to the ATM, and now to the online experience. With these advances in technology, selecting a bank that will work for you should be about more than recommendations or convenience. Do your research!

Four questions to ask before choosing your first (or next) bank

1. Do you prefer a physical branch location?

Take a look at your comfort with technology and your banking habits. Chances are, you won’t need to visit or haven’t been to a local branch in the past year. That’s because these days, most people do their banking online or at an ATM. But choosing a bank with a local branch does have some benefits.

Local branches offer other financial services such as auto loans, home loans, check cashing, CDs, credit cards, and more. On top of that, you get to talk to an actual person! Opening an account or applying for a loan can be a bit confusing, especially if you’ve never done it before. Having an actual banker guide you through the process can make it a little easier.

If you prefer a local branch, you can use Google Maps to find your local banks, compare available services on each bank’s website, and you can ask more questions at your local branch.

For those of you who don’t need a physical branch, check out this list of the Best Online Banks of 2017. Be sure to find out what you’ll need to open your account online.

2. How often do you use the ATM, and where do you prefer to access your cash?

Withdrawing cash. If you have an account at a big bank, you can usually use any of their ATMs to withdraw cash at no charge. Bigger banks have more ATM locations available, so they typically charge fees to use out of network ATMs. Alternatively, some local banks and credit unions use Co-op Network ATMs that allow you to pull out cash at no charge at any in-network ATM.

Before choosing a bank, I would take a look at the local, in-network ATMs to see how convenient they are to your home or work. Next, I would then check to see how safe the area is surrounding the ATM, by actually visiting the location.

  • Added bonus: Some banks will reimburse you the fees for withdrawing at an out-of-network ATM. Check your terms & conditions to see if this benefit is available to you.

biggest bankCourtesy of GoBankingRates.com

Depositing cash or checks. If you will be depositing your funds at an ATM, you’ll need to use an in-network ATM in order to do so. Keep in mind, if you are using a Co-op ATM for your online bank or credit union, it may take additional business days for your check deposits to clear.

Related: Bank on the Advantages of Credit Unions

3. & 4. Does your employer offer direct deposit? How much do you intend to deposit and keep in your bank account at all times?

Waived Monthly Fees. These two questions are not directly related, but will usually determine whether you are qualified for a waiver of your monthly service fees. The minimums vary from bank to bank, but the magic number is usually around $1,500 average balance OR a minimum monthly deposit of $500.

wells fargo

A screenshot from the Wells Fargo website

Higher Tier Checking or Savings Accounts. A higher average monthly balance will usually qualify you for additional checking and/or savings account benefits like free checks, high-interest checking accounts, and more.

Sign up Bonuses. There are several bonuses out there, such as this Chase promotion for up to $300 when you open an account. These bonuses usually require a larger minimum of $10,000 or more.

See More: 20 of the Best Bank Promotions and Bonuses

Other things to consider

    • Be sure that the potential banks you look into are FDIC insured (most banks are). Read more about this on FDIC.gov.
    • Know your fees. Do you tend to keep a low balance? Do you sometimes overdraft? Your fees can pile up if you don’t keep enough cash in your account. As a college student, I was guilty of overdrafting several times a year. In fact, I had over $300 in fees in one year alone! Do your research, and know which fees you could incur.
    • Are you planning on financing a car or home in the near future? Selecting an institution with competitive loan rates might make it easier to manage if your loan and bank are consolidated at the same location.
    • You are not restricted to one bank! You can use a combination of brick and mortar banks, credit unions, and/or high-yield online savings accounts.

In my case, I found that there is an advantage to having multiple bank accounts. I have taken advantage of low auto loan rates at one bank; I get reimbursed for ATM withdrawal fees from my online bank; I have a different high yield online savings account for my emergency fund, and I have the option to speak to an actual banker, in person, at another institution.

No matter how many accounts you have, it is important that you ask these kind of questions when choosing your next bank. That way, you will know exactly what services you are getting and how well a bank will fit your needs.

When did you open your first bank account? What’s the biggest learning lesson you’ve come across since then?

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