There are thousands of options out there, but by asking the right questions, you can make sure you’re choosing the best bank for you and your needs.
Choosing a bank—whether it’s your first bank, you’re looking to open a specialized account, or you’re looking for different banking services—from the wide array of options out there can be daunting. Of course you know what you need (checking or savings account, a high-interest account, etc.) but, in the moment, you may forget to ask about important details that could make or break your banking experience.
We spoke with Anthony Giorgianni, Associate Finance Editor at Consumer Reports, about the questions you need to ask when you’re looking at a new bank. Remember to ask these questions or research them before you commit to a bank account, and you’ll save yourself a lot of hassle (and maybe even some money).
1. What fees are there?
All banks have penalty fees for things like overdrafting an account, but many also charge fees simply for having and using a checking or savings account (or even for getting paper statements!). “It’s really important to know what the fees are and how you avoid them,” Giorgianni said.
Many banks that do charge checking and savings fees have requirements—such as a minimum balance, a certain number of debit card transactions per month, or a qualifying monthly direct deposit amount—that, if met, waive the monthly fee. If your bank does charge these kinds of fees, be sure you’re able to meet the requirements to avoid them. If you’re not, you may want to consider a different bank.
2. What are the account requirements?
Some banks have minimum requirements for opening an account: a minimum balance, for example. Be sure you’re able to meet that requirement, but also be aware of what might happen if your balance falls below that minimum. Giorgianni said some banks will even close your account if your balance is below a certain amount: Be sure your account’s minimum requirement (if it has one at all) is one you can easily maintain.
3. Where are your ATMs?
It happens to all of us: You join a local bank or credit union and soon learn—while traveling, for example, or after a move—that, as great as its offerings are, it doesn’t have many ATMs, and the ATMs it does have aren’t conveniently located. You may not use ATMs often these days, but you never want to be caught in a bind where you’re forced to pay a fee to use another bank’s ATM in order to withdraw your own cash.
“It’s really important, for a local bank, that it has ATMs where you need them,” Giorgianni said. “I can’t emphasize that enough, because people forget. They’ll open an account in a small bank and it just doesn’t have ATMs where they need them.”
If you’re committed to a smaller or local bank, check to see if it reimburses for ATM fees. If it doesn’t, be sure you are in an area where its ATMs are widely available; if you move, especially to a different state, you will likely need to switch banks.
4. Are there withdrawal or transfer limits?
This typically applies to online-only banks, which often offer high-interest savings accounts. These accounts will help you rack up interest on your money, but if they limit how you can withdraw that money, it may not be worth it.
“Some banks limit you,” Giorgianni said. “If you have a substantial amount in a savings account, [you could be] limited to how you withdraw and the amount you can withdraw on any one day. It can take a really long time to get your money out of the account without closing it.”
You may not plan to withdraw this money often, or only in small sums at a time, but if you’re storing your emergency fund, you may want to be sure it’s in a bank that allows you to withdraw large amounts at once, so you can use your money when you need it.
5. When is interest paid?
Most banks pay interest monthly; some, Giorgianni pointed out, can pay quarterly. This is great if you’re racking up interest on your long-term savings account, but it can come back to hurt you if and when you want to close your account.
“With some banks, if you pull the money out at the wrong time, you will not be paid the interest that you’ve accrued for that month,” Giorgianni said.
Depending on how much you have stashed away in your account, losing that interest could mean missing out on a lot of money. To avoid this, be sure you’re aware of when your bank is paying out the interest, and time your withdrawal accordingly.
6. Are there penalties for closing the account early?
If you shop around for high interest rates or have your money divided between several accounts, you want to be sure you’re not incurring penalty fees by closing an account (in favor of one with a higher interest rate, for example) within 30 or 60 days of opening it. Find out if an account has a closure policy, and if it does, be sure you plan to keep your account open long enough to avoid incurring a penalty.
7. Can I write checks from this account? Is there a debit card?
Services like these make it easier to access your money. Most checking accounts offer these services, but they also have infamously low interest rates. If you want your money to earn good interest, but you also need to be able to use it regularly, you may want to look for a money market account or a savings account with a debit card or check-writing capabilities.
“If you’re interested in writing checks, having a debit card, or using an ATM, it’s really important to find out whether the particular account you’re opening provides those kinds of benefits,” Giorgianni said.
All the information you need to know about your new bank will be outlined in the deposit agreement: This vital document explains exactly what you’re committing to with your new account. “They can be really difficult to read, but you really have to know what rules you’re playing under,” Giorgianni said.
If you’re unsure about anything or aren’t getting the answers you’re looking for, turn to the deposit agreement. A careful read of the fine print could reassure you—or make it clear that you should look at another banking option. To learn more about the best banks (and the worst), check out “Best & Worst Banks According to Consumer Reports Members” from Consumer Reports.