The road to financial freedom starts with a bank account. You need a secure place to store your savings, but also the ability to grow and leverage your savings into something bigger. But not all banks are created equal, so how do you select the right one?
Each bank offers different accounts and benefits so you want to choose one that aligns with your goals. Unfortunately, the banks do not make it easy to compare their accounts to others. Sure, you can research interest rates, credit scores, online portals, and the insurance policies of the bank, but it’s challenging to uncover the truth about the financial security of a bank or it’s customer service.
Below you will find some helpful tips on how to select the best bank account for your needs. We’ve also compiled a list of must-do’s for anyone with a bank account.
How To Select The Right Bank
If you’re saving money, you want to look for the highest interest rate on your account in order to maximize the amount of money the bank pays you each year. On the flip side, if you plan to borrow money, you want to look for the lowest interest rate options in order to minimize the fees you’re paying for borrowed money.
Many banks will charge a fee depending upon the account type you select. For some people, opening a premium account that costs $100/year, but comes with free wires, might be more cost effective than a non-premium account. Be sure to read all the associated fees and select the account that best suits your needs. For most, this means choosing the account with the lowest amount of fees.You may want to open your account with a bank that allows you to manage financial transactions like automatic bill payments and certified checks.
Checking Account vs. Savings Account
What is the difference?
A checking account is set up to allow easier transactions with respect to withdrawals and deposits. It’s the account that is best suited to help you manage your spending and income activities (think paying bills and receiving salary payments).
A savings account, however, is set up to help you save money. It’s best to keep your expenses, bill paying, and other activity in your checking account and separate from your savings account. With your savings account, you can focus on growing your nest egg.
Selecting the best bank for your needs is a critical step for effectively managing and growing your money. Remember to compare all of the benefits and services each bank offers prior to opening a bank account.