What Kind of Bank Account is Right for You?
When opening a new bank account, most people face a number of choices. It can be almost bewildering trying to decide between different banks, types of accounts, and services. The spread of online banking gives customers a new choice, of doing all their banking online and never having to deal with a brick and mortar bank. The best way to decide is to choose the bank and account that best fits your needs. For beginners, it can be helpful to know the basics before you apply for checking account.
Which bank should you choose?
This is the first question you will face when opening a new bank account. The answer depends on what your banking needs are. National banks have a network of ATMs and branches across the country. If you travel often, or if your job requires you to move every few years, this may be the best choice for you. Local banks are generally limited to your state or area, but they do have tie-ins that allow you to use ATMs around the country and even if you travel overseas.
Whichever bank you choose, it’s important that you pick one where all deposits are federally insured. Typically the FDIC insures deposits up to $200,000.
Checking or savings?
The next step after you find a bank is to decide what type of account to open. Most people just apply for checking account to begin with, and then add savings and other services. Checking accounts are all you need for day to day services, though many banks offer linked checking and savings services. They may also waive all fees for linked accounts, or require you to maintain a minimum amount on deposit to avoid fees.
Even if there are no regular monthly fees, most accounts will still charge fees for returned checks and other services like blocking checks or wire transfers. Different types of accounts have different rates of interests for deposits. It’s a good idea to shop around for the best interest rates.
What are the benefits of online banking?
You do everything online – work, shop, and hang out with your friends. Online banking is just an extension of this trend. In fact, a Gallup survey conducted in 2016 found that 60% of those surveyed agreed that the U.S. is on its way to becoming a cashless society. In this future, credit and debit cards and other forms of electronic payment will be the only way to make any purchases.
Most banks now have a robust online presence, and even their own apps, which allow customers to do almost all their banking online. But they still have brick and mortar branches if you need to do speak to someone in person. Online banks don’t have a physical presence at all but offer you the convenience of only mobile banking. You can access your money through tie- ins with other banks that let you use ATMs across the country. In general, online banking is a convenient way to manage your money but it shouldn’t be your only or even your primary bank account.
Before you go ahead and apply for checking account, it helps to do your homework, so you can find the bank and type of account that best fits your needs.
