How Do I Choose A Financial Institution?

by in Home and Business Finances

With the turmoil in the world and in the economy right now, many people are moving their money out of the big banks.  However, how you decide where to move your money?  Here are a few things you should be looking at before you change banks:

1.  Fees.  I hate fees. I personally use a small local bank and credit union, and neither of these charge fees for the majority of their services.  According to, about 3/4 of large credit unions offered free checking with no strings attached!  I also don't want a bank that charges me to talk to a teller or to use a debit card.  You have to ask yourself how important fees are to you.

2.  ATMs.  If you use your debit card to get cash, you need to make sure that you have access to your money where you are.  For us, our small bank has joined an ATM network, so we can access our money nationwide (without a fee).  Some online banks will even reimburse you for fees incurred at bank machines.  All of those non-network ATM fees can add up very quickly, so if you use an ATM card, you need to make sure you are taking your money out of an in-network bank.

3.  Branches.  If you like face-to-face service, you are going to want to pick a bank that is close to you.  However, if you do most of your banking online, this may not be a deciding factor.

4.  Customer service.  For me, this is a make or break service for a bank.  If you treat me horribly, I will move all of my money.  I remember several years ago where a bank blamed me because their online bill pay service was not paying my bills on time (yet, everything was set up correctly and should have been issued on time).  Needless to say, as soon as we could, we moved everything out of there.

5.  Technology.  Most banks offer online accounts and bill pay.  However, you have to do a little more searching if you want a bank that has mobile banking if that is important to you.  Some of the bigger banks even let you scan a check in with your cell phone for a deposit!

6.  Ownership.  Right now, this is a huge sticking point for a lot of people.  Many big banks are owned by shareholders.  Their main goal is to make as much money for them as they can (which means that money is coming out of their customers' pockets).  Many people also blame the big banks for the financial crisis we are in right now.  Nonprofit credit unions are owned by the customers and give back to their members with consumer friendly products and services.

7.  Financial Products.  Most banks/credit unions offer saving, checking, borrowing, and online banking.  However, depending on what your current situation is, you may need more than that (for example, a mortgage loan or a small business loan).

8.  Rates.  You want your money getting the most interest as possible.  Also, you want the lowest rate on your loans.  We belong to the credit union we do, because they offered us an interest rate that was 4% lower than what Toyota did when we bought our Prius!  As you can see, comparing rates is very important!

9.  Safety.  Most bank and credit union deposits are deposits are federally insured to $250,000.  However, if you are making deposits in larger amounts than that, this is something you need to look into.

10.  Communication.  How do you want to reach the bank?  Online?  By Phone?  Chat? In Person?  Make sure that your bank has a way to reach them that you are comfortable with.

Everyone has different wants and needs.  There is no single answer that works for everyone.  You may need to use several institutions or maybe one big bank depending on what your situation is.

How do you choose where you do your banking?  Do you have any advice you'd like to add?

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About the Author - Lisa Martin

Lisa Martin is a full time work at home blogger and a social media consultant. Her blogs cover a wide variety of topics including travel, cooking, product reviews, and what is going on in her daily life. She has been interviewed by the Chicago Sun Times, The New York Times, and The SouthTown Star. You can read Lisa’s blog at My Thoughts, Ideas, and Ramblings.


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{ 5 comments… read them below or add one }

Lindsay @ Laughing Lindsay January 3, 2012 at 3:51 pm

I was actually talking to my dad about switching banks later this year when I get a job teaching (hopefully). My current bank makes me have a certain amount of money in my checking account or I have to pay a fee. However, when I first signed up with them, it wasn’t like that. It was just a free account. Then, they changed their rules to having a monthly fee or ensuring that I have x-amount of dollars in my account. Bah. I’m not very happy about that and they should have told me about it beforehand.


pammypam January 3, 2012 at 3:51 pm

i only do online banking. its inconvenient if i hafta get outta the car so if i HAVE to go to the bank and use the drive thru, it better be open the hours i need it; after 5pm and on the weekends. otherwise, whats the point?


Rae January 3, 2012 at 7:21 pm

God I hate banking… I’d also add to the list that you should look into their wire processes if you tend to send and receive wires a lot. In Canada, I could fax in wire requests to TD Canada Trust (still do) but with Wells Fargo here in the states, they only allow wires to be done in person (which is a huge pain in the ass and something I didn’t think to check before I had ALL my Texas based accounts there.

Credit unions are good, but keep in mind they’re typically hyper-local, so if you ever move (all my Florida based accounts are with a credit union) it makes it that EVERYTHING needs to be done by mail (and if they only do in person wires – HUGE issue).

Also, re ATM’s, be sure to check their daily cash withdrawal limits and their daily point of sale limits. Nothing sucks worse than going to purchase a new iMac on your business check card only to have the sale declined because you didn’t know your POS purchase limit was less than the computer, even though you have plenty of money in the bank to cover it. :)


Kelli January 4, 2012 at 2:30 pm

Love all you tips. I don’t need them but some really made me think about what I would need to do if I was needing to choose another financial institution! Great job.


Cindy @MomMaven January 5, 2012 at 7:48 pm

we are in the process of thinking about changing banks…we want to change, but it is such a hassle and other than the increasing fees, our current bank offers all of the features I want in a bank. This is a tough decision. Thanks for the list of things to keep in mind.


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