There are various factors you need to consider when choosing a bank to handle your finances. Firstly, it is important to note that banks are profit organizations and their primary goal is to maximize profits for their shareholders. This means that all their programs, products and services are geared to making the most profits from your financial transactions. Therefore, on your side, you must select the bank that gives you the most value for the services that they give you. Keenly review the terms and conditions, their fees and their products to get any hidden costs before settling for a bank. There are different types of banks and each type has its advantages and disadvantages.
Traditional banks provide us with a convenient way of accessing our funds and making payments for bills and other payments. They have a large network of ATMs that make it easy to withdraw our funds and make deposits whenever we need to. However, banks are known to have excessive and hidden fees that eat into our finances. It is therefore important that you shop for a bank that charges less fees and still gives you quality services.
Unlike the traditional banks, online banks have reduced fees and they give a higher interest rate on savings. This makes the banks ideal for a savings account. Opening the account and operating the account is easy since you can open and transact from the comfort of your personal computer. Some online banks will even reimburse you ATM fees since they do not have their own ATMs. However, the pitfall of these bank account types is that it is hard to make deposits.
One way of capitalizing from both types of banks is to have a checking account with a regular bank to handle all your transactions with convenience. However, ensure that you get a low-fee bank to reduce on your banking expenses. You can then have an online account linked to your checking account to maintain your savings so as to gain from the high interest rates.
Credit unions are banks that are run as non profit organizations. The banks are owned by the members. Since they are not driven by the profit agenda, they have a much lower fee structure. However, many of these credit unions have fewer ATMs and their accessibility are not as convenient as those of traditional banks. When considering whether to open an account in a credit union, you should check for the services they offer for supporting small businesses. Some credit unions do not offer facilities and services for small businesses. You should also check whether they have advanced online banking that provides online-bill-pay services.
Points and Reward System
Most major banks offer a points and reward system on their credit cards. Reward points are accumulated any time you spend using the credit card. When considering whether to join such a scheme, you should actually consider whether you will ever use such points and what it takes to redeem such reward points. There is no need of applying for the reward system if you will never get to use the points. You should also check whether such a system is free or you are charged an ongoing cost once you join the system.