When it comes to selecting a bank to meet their financial needs, American consumers have no shortage of options to choose from. In fact, as of March 2024, there were more than 4,500 FDIC-insured commercial banks and savings institutions in the United States — and the U.S. is home to more banks than any other nation in the world.
So with so many choices available, just how does one go about picking the right bank? While the priorities for each consumer will vary based on his or her individual needs and situation, for those wondering how to choose a bank, the major factors to consider are typically similar.
How to pick a bank — 9 top considerations
When seeking out the perfect bank to meet your financial needs, be sure to look into these nine important factors before making your decision:
- Account types and products/services offered — When looking for a bank, most consumers are likely to have a specific and immediate need in mind that they’re looking for the financial institution to cover. Common needs among banking customers include accounts such as checking accounts and savings and money market accounts, investment vehicles such as certificates of deposit (CDs), and loan-related offerings such as mortgages and credit cards. Whatever your specific need may be, a good first step when researching your banking options would be to confirm that each candidate you’re considering offers the account(s) and/or financial service(s) you require.
- Fees charged — Most banks charge fees for some (or even all) of their services, and in some cases, these fees can be steep. In addition, whether the fees for the service(s) you’re seeking are one-time or recurring ones, they can add up — especially over time. Before deciding on a bank, you’ll want to look into the fees it charges, especially in the areas that will impact you based on the services you anticipate you’ll be using regularly, to ensure they’re not excessive. Commonly charged fees to investigate include account-maintenance fees, out-of-network ATM fees, overdraft fees, nonsufficient funds fees and transaction fees.
- Interest rates — While the vast majority of banks pay interest on money held in savings accounts, money market accounts and CDs, some will even offer interest on deposits held in checking accounts when certain conditions are met. And if you look for a bank that offers interest rates on the higher end of the scale, even a small difference in interest paid can add up to significant sums over time — especially when you consider the power of compound interest over the long haul. To maximize the passive income that having your money work for you can bring, look for a bank that offers higher rates of interest on the money you’ll be depositing into your accounts.
- Financial stability — No matter how much money you expect to have your bank hold for you, to minimize your risk of any potential loss, you’ll want to make sure the institution is financially stable and well capitalized. The first thing in this area to look for when considering your banking candidates is Federal Deposit Insurance Corporation (FDIC) membership. If the bank were to fail, this guarantees that the money you deposit there is insured by the federal government for up to at least $250,000 per ownership category. You can also research your candidate banks’ financial standing by checking on their ratings with independent credit rating agencies such as S&P Global and Moody’s.
- Customer service — Of course, as with any business you choose to work with, speedy, reliable and helpful customer service is important — and this is especially true when it comes to your money and your credit. To ensure that the candidates you’re considering will be there to help when you need assistance, look for banks that offer a range of routes for reaching its customer service representatives, including in-person and via the phone, email, etc. Also, if you prefer a particular communications avenue for getting help with any banking needs or getting your banking questions answered quickly, make sure the candidate(s) you’re considering offers this option for customer service queries.
- Convenience — In the modern era of banking, many of the money-related transactions that used to require a trip to your local branch during business hours can be achieved from anywhere and at any time via online banking and mobile banking. And if these options are important to you, you’ll want to ensure that any candidate banks you may be considering offer them. Of course, there are also likely to be cases when you want to meet face-to-face with a banking professional to get your questions answered or to get your banking needs otherwise met. Or you might need easy access to an in-network ATM. So to ensure convenience on these occasions, you may want to look for a bank with branches and/or ATMs in the area(s) where you live and work — and perhaps even in other areas where you anticipate a regular need to perform your banking transactions.
- Security — Especially when it comes to protecting your money and your privacy, you’ll want to make sure that the bank you choose has ample security measures in place. And on this note, it’s critical to look for a bank that’s committed to implementing and maintaining the latest, leading-edge technology to keep your personal information and your money out of the hands of would-be criminals. Particularly in the digital age, it’s a good idea to seek out a bank that employs protective features such as encryption and multi-factor authentication to keep your digital accounts safe.
- A solid reputation — You can never be too careful when choosing the banking partner that will be handling your money and financial information, so it’s a good idea to be a bit more selective than usual when looking for a bank. To help ensure your future satisfaction, try to seek out a bank with a reputation for serving its customers well and a lengthy history of account-holder gratification. You can do your research by checking online reviews, as well as by asking friends and family members to share their personal recommendations for banks with which they’ve had positive experiences.
- A good feeling — Ultimately, once you’ve researched all the factors outlined above and have narrowed your list of candidate banks down to your final couple or few options, it may be time to trust your gut. Choose a bank with team members who make you feel at home, with community-involvement efforts that impress you, and with any other characteristics that you may be looking for or that align with your personal preferences and beliefs. Whether you’re seeking out a community bank with a dedication to personal service, a larger bank with more financial and technical resources, or a high-tech, high-touch bank that offers a blend of both, you should feel good about working with the bank you choose as a partner.
At The Southern Bank, we pride ourselves on offering friendly, personalized service to all of our customers — and that includes providing guidance when you have questions about any of our banking services. To learn more about our Personal Banking services ranging from Personal Checking and Personal Loans to Savings & Money Market, Certificates of Deposit (CDs), Mortgages and more, check out the Personal Banking page on our website or visit one of our local branches for friendly, in-person service with a smile.