According to surveys, adults in the U.S. have used the same checking account for 16 years on average and 40% of all Americans have never switched banks at all. But is that loyalty really what’s best for you and your money? Certified financial planner Suzanne Himes, with Asset Planning Corporation, is here to discuss what to consider when choosing a financial institution.
SUZANNE, THERE ARE SO MANY OPTIONS OUT THERE, HOW DO WE BEGIN TO CHOOSE?
It’s important to consider your current financial needs and your individual banking habits, as well as having some flexibility for future needs.
There are three main types of personal financial institutions to choose from:
- Traditional banks – national “big banks” and community banks
- Credit unions – local, not-for-profit, owned by members
- Online-only banks – no physical branches
Broadly speaking, the differentiators among banks that we can think about are:
- Products and Services
- Interest Rates and Fees
THAT MAKES SENSE… SO WHAT ARE SOME OF THE QUESTIONS WE SHOULD BE ASKING?
Beyond basic checking and savings accounts, what are the services needed?
- Credit cards
- Personal loans
- Cashier’s checks
- Automatic bill pay
Are rates competitive?
- Interest rates earned on savings
- Interest rates charged on loans
- Account and service fees
Convenience factors: What’s important to you?
- One-stop-shop for business and personal banking
- Branch and ATM locations
- Online banking, mobile apps
….And whichever you choose, make sure deposits are insured
- FDIC or NCUA – $250,000 per depositor, per ownership category
FAST MARKET FACT: (National average interest rates)
- Bank Savings .09%
- 3-Month Treasury Bill 1.54%
- 30-Year Fixed Rate Mortgage
- 48-Month New Auto Loans 5.45%
- Credit Cards 14.87%
Want to learn more about what to consider when choosing a bank? Do you have other general questions about financial planning or investing? Send your questions to our Knoxville Certified financial planners or directly to email@example.com!