What to Look for When Choosing a Bank or Credit Union
When choosing a bank or credit union, you should consider several factors.
Security, customer service, and the types of services you need are a few features to explore. Let's look at these and other considerations you should think about when looking for your next bank or credit union.
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What are the Differences and Similarities between Banks and Credit Unions?
They both securely hold your funds and have many of the same products and services, such as checking and savings accounts. You can get home loans and auto loans through banks and credit unions too. Credit unions have thousands of ATMs across the country, similar to a bank's coverage. So, what makes a credit union different from a bank? A few differences include:
- Banks are profit-driven; credit unions operate as not-for-profits.
- Banks must report to stockholders. Credit unions serve their members.
- Credit unions have a greater focus on the community and surrounding area.
Check Security Features
Security should always be top of mind, especially when considering an institution to hold your hard-earned cash. Whether you put your money in a bank or credit union, it's crucial to know that your funds are insured. If a bank or credit union does not insure your deposits, it is best not to use them as your financial institution.
It would also be best to ask about fraud prevention and monitoring services. Banks and credit unions will have some of these services available. Many credit unions go a step beyond and help consumers through education. They show members how to recognize scams, take action against fraud, and what to do if they fall victim to fraudulent behavior. Ask your financial representative if they offer the following:
- Online multi-factor authentication
- Monitoring of transactions
- Email, text, or phone call alerts
- Credit monitoring
- Fraud prevention education
Know What Type of Account You Need
Banks and credit unions have many of the same account services. Both have a wide variety of checking accounts and savings accounts, including saving for higher education and retirement. Before setting up an account, it's a good idea to know your needs. Do you need to open a joint checking account? Perhaps it's time to start saving for a child's college. Whatever your money goals are, a bank or credit union can help you achieve those.
Inquire About Fees
Fees for banks and credit unions serve a purpose. For banks, tacking on fees can support shareholders, increase profits, and act as a way to cover costs associated with maintaining the account. Credit unions may have fees too, but they are usually lower than traditional bank fees.
There are ways to avoid fees, which will be based on the type of account you have. For instance, some accounts have a minimum balance fee. Maintain or exceed that minimum, and you'll avoid the fee. Be sure to ask about fees before opening an account.
Check the Online Banking Features
Most financial institutions will have a variety of online banking features. It's important to remember that your bank's online web service and mobile banking app are two different things. You can do your banking business on both, but a mobile banking app is only available on your smartphone. Both offer 24/7 access. Mobile banking apps allow for mobile check deposits.
Find Out What the Rates Are
Of course, you'll want to park your money at the bank or credit union that has the best rates and lowest fees. When you're ready to open an account, talk with the financial representative and get a list of rates associated with the account you're opening.
Rates for home and auto loans and other products will fluctuate. It may turn out that you open up a bank account today but find a better loan rate at a credit union tomorrow. If this is the case, you can always join the credit union to take advantage of a loan product or other financial offering and keep your bank account open.
How is the Customer Service?
Ask a network of friends for recommendations and what they like or dislike about their financial institution. Read reviews on customer service. Credit unions are well known for offering highly personalized customer service, and if this is something you value, it's worth checking out a credit union in your area.
