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Your Take: What Do You Look For in a Bank or Credit Union?

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Ceramic Piggy BankThis week Liz Weston wrote about how to shop for a new bank and it made me think about how we chose the banks we work with now. For us, the criteria for judging a checking account differed from the criteria for judging a savings account. We use the two different types of accounts for different purposes, so the criteria for picking the “best” for us will vary between the two.

For a checking account, I’m looking for a brick and mortar back that is the cheapest option with the widest reach. By cheapest, I mean one where I won’t have to pay any fees as long as I meet fairly straightforward rules like a minimum balance. By widest reach, I want one where there are ATMs in as many areas as possible. That’s why we still have a Bank of America MyAccess Checking Account – no minimum balance and no monthly maintenance fee if opened online. There are Bank of America ATMs pretty much everywhere, so the reach part is satisfied.

For an online bank, it’s all about interest rates. Right now, most of our money is at Ally Bank because they lead the pack in high yield savings accounts. My strategy used to be to open an account at the highest yield bank and put any new savings into that account, but we’ve recently abandoned that practice. We’re trying to simplify our finances and opening a new account just to get a 0.1% difference isn’t worth it to us. (note: we weren’t rate chasing, as that rarely works out, we were only moving new money from checking to savings)

Lately, however, we’ve been thinking more about supporting local credit unions. When you go with a local credit union, it’s more likely that your funds will be reinvested back into the community. When that happens, the community, and thus you, benefits more than if your money sits on the balance sheet of a huge national conglomerate.

What do you look for in a bank and why do you do business with the ones that you are with now?

(Photo: alancleaver)

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46 Responses to “Your Take: What Do You Look For in a Bank or Credit Union?”

  1. otipoby says:

    Interesting points. I have always had a savings and checking at the same bank. But I can’t really tell you what the real benefit of that is except easy transfer of money.
    For checking, access is very important to me.

  2. Ken says:

    One important note about credit unions is that many are part of a network of shared branches and ATMs. You can take care of many transactions at a shared branch which gives you branch-like access across the nation. This can help you meet the wide availability requirement.

    For those who want local brick-and-mortar branches, free checking and high interest rates, reward checking could be the answer. More banks and credit unions are launching reward checking accounts, so you may be able to find one in your city.

  3. Glenn Lasher says:

    I want cheap ATM access and a staff with a clue. Nothing more.

    As I have probably mentioned before, I bank with a very small credit union. They have one ATM, which is located in the front lobby of my office. Their one branch is located four blocks from my house.

    However, I can call them up and say, “This is Glenn Lasher” and they recognize my voice. They recognize my face, also, as well as my wife’s. I don’t have to remember my account number (although it is only five digits, making it very easy to do), and I don’t have to provide any sort of password or PIN when talking to the tellers, who are also the telephone CSRs. I can ask any question to any one of them and get an authoritative answer. I also have direct access to the President, who works as a web designer at my company, putting her two floors above me at the office.

    These things, to me, are worth more than anything else.

    Incidentally, the only credit card held in my household that hasn’t raised its rate or done other dirty tricks is the one I hold at this CU. It is holding steady at 12%, no more, no less, no nonsense.

  4. Most of our money is held and managed out of a credit union for the reasons you stated. After moving to Atlanta however we found no member CU that were convenient. Just to have easy access and build a relationship we chose a regional brick and mortar to store a small savings/checking account.

    BofA lost us when we lived in L.A. At that time they charged $1.50?) for ATM transactions. Then one day I decided to be frugal an walk into the bank… they hit me with a $2.00 charge for using a teller! That’s when I asked for one more transaction… withdrawal of all my funds.

    Go figure, now part of my retirement is invested in them (index fund) and now I want them to charge even more :-)

  5. Steven says:

    I look for a company that values it’s customers more than their shareholders. Basically that means most national banks suck, especially BoA and Wachovia. Personally, I’ve had good experiences with TD Bank. Minimal interaction, but they’ve all been good when I’ve gone to the branch.

    My main account is at a credit union, because they are there for the community. I use EFFCU and they have been up front with me with any questions I’ve had. Apply for a car loan, actually received the lowest promotional rate advertised, and even told me my credit score.

    Basically, in the words of Jon Stewart, “Be a !@#$ing person!!!”

  6. Soccer9040 says:

    Bank One/Chase was a great bank for me over the last 15 years, but lately they are beginning to bend me over to try and take advantage of me.

    Maybe I should have expected it. I’ve never paid a fee for any of my accounts, personal or business. They pay me upwards of $1,000 a year to use their credit cards (in the form of cash back). I only use my ATM to deposit checks and then promptly transfer funds out to ING.

    I’m just using them as a conduit to my real money, which isnt held with them.

    Is this wrong? I’ve already made up my mind, but I want to know your thoughts?

    • Frugal says:

      “I’m just using them as a conduit to my real money, which isnt held with them.”

      What is wrong with this? Why do you feel something may be wrong?

      I do the same and feel good about it. Afterall, this is all business.

      • Jim says:

        And it’s within your rights, it’s not like you’re doing something deceptive. If they had a problem, they’d close your account.

        • Soccer9040 says:

          I guess I forgot to mention….On Jan 1 they “upgraded” my accounts for my convenience. They were 12 year old Bank One Legacy accounts they said they wont support anymore. For the past 4 years I have had to explain that I like my accounts how they are and I didnt want them changed at all. What do you know, I get a service fee in the 1st month. I also heard that because of this change they will start charging for Quicken access. I was grandfathered into free access as long as I held onto my old accounts. I still dont understand what they are charging for, but I havnt seen the charge yet.

      • Soccer9040 says:

        I dont actually think its wrong or I wouldnt be doing it. I just think they are on to me and realize I dont earn them anything.

    • Jim says:

      Haha, no it’s not wrong. They still make money off the interest they aren’t paying you for the time it does sit in your account.

      • Soccer9040 says:

        My 1099 came the other day. I earned a whopping $0.21 cents all year from Chase. Even if they earned 20 times what they pay on my savings they wouldn’t have enough to pay for a decent lunch.

    • CK says:

      they also make money off of your credit card usage.

    • Chris says:

      Trust me, they are still making money off of your card transactions. They will not pay you unless the cards are in their favor.

  7. zapeta says:

    I have a credit union that I really like. They offer rewards checking so I get a great rate on my money by meeting their simple requirements which are things I do anyway. While they don’t have a large ATM network, they forgive ATM fees as long as the requirements for my checking rewards are met. I look for low fees and I want good customer service. Most of the tellers at my local branch recognize me and if I call in an actual person answers the phone!

    For an online bank, I’m always looking for a good rate. I used to rate chase but these days they’re all pretty close and they all pay less than my rewards checking.

  8. Chris says:

    For a checking account, I went with a community bank that offers Reward Checking. They pay a high rate of Interest, usually higher than CD’s up to a balance cap of around $25,000. You also get all atm fees refunded. The only requirements are estatements, direct deposit or ach, and 10 debit card transactions a month. If you don’t do one of these things you don’t earn the high interest or get your atm fees back that month.

  9. NateUVM says:

    Like a lot of people, I do most of my banking on-line. I have both my savings and primary checking through ING. I do still maintain an account with a community bank so that I have easy ATM access. A nominal amount is direct deposited from my paycheck and that covers any ATM expenses I may have.

    The only reason I have the account with the particular bank in question is because it was a free checking account when I opened it. I have since upgraded it to a free interest checking account. It doesn’t pay a lot of interest, but with most of my funds with ING, there really is no reason to switch to another bank. Again, it’s just there for easy ATM access. Excess funds get transferred back to ING.

    As for ING, I’ve been with them almost as long and it really is all about ease of use with them. Their rate isn’t the best you can find on-line anymore, but it’s still pretty good and I feel that what I get out of the ease of use end more than makes up for trying to go out and chase rates, opening up other accounts, etc… There is a cost to upending my whole finanical system!

    I do have a couple of small share accounts open with a couple of credit unions, but those are to maintain membership while I take advantage of their low rates on car loans and mortgages.

    NOTE – I might consider one of these 8-10 debit transaction checking accounts with the higher interest at some point. But right now I’m working towards two free (or highly subsidized) tickets to Europe with one of my rewards credit cards. I want to maximimize the use of that card before they change the rules on me!

  10. My employer’s credit union consistently pays better rates than anywhere else. The standard “passbook” account often pays more than other banks’ CDs.

    How can this be possible? Because my (very large) employer picks up the tab for all of the operating expenses (credit union employee salaries, floor space, etc).

    The only bad thing is that they don’t offer a checking product.

  11. cubiclegeoff says:

    I use online savings because there are no comparable rates elsewhere.

    I use USAA for checking because there are no fees, I have insurance with them, they cover my atm fees on the rare occasion I use an atm, and I can just scan my checks to deposit them. Overall I don’t need a brick and mortar bank and don’t see a need anytime soon. So far, the local credit unions and coops can’t compete.

  12. tbork84 says:

    I have always had my checking and savings at Bank of America, but recently I have been questioning why. Many credit unions offer online bill pay and free checking accounts, and the interest rate on my savings account is so terrible that I have been putting money into an online savings account (FNBO Direct) for months. My employer is partnered up with a credit union and I am increasingly interested in moving my business there.

  13. CK says:

    ATM access for a physical bank.
    Rates and ease of use for an online bank.
    Low loan rates for a credit union.

    • tbork84 says:

      More and more credit unions have deals with some of the generic atms to ignore their fees and will even reimburse you for any extra fees.

      • CK says:

        This is true but I use ATMs for deposits and it’s my understanding you can’t do that at most “generic” ATMs.

  14. For me it’s how well the bank works with me. That sounds a bit arrogant, but I am, after all, their customer.

    A bank is one of the most intimate business “partners” we’ll have in life, and it’s important to know they’ll do right by us.

    Issues like customer service, accomodation and problem resolution are super important. I know that not every issue will be resolved in my favor but if NONE of them are, it’s time to shop for a new bank.

  15. lostAnnfound says:

    Customer service is #1. I know most of the faces at my CU & they know me. Have had issues with checking account over the years, which were always handled promptly and very politely, even when it my own error. :)

    ATM access is not an issue for me because I don’t use them, but if I needed to the CU is part of the SUM Network for ATM use. They offer plenty of products & services, from passbook savings to mortgages and everything between.

    For checking – free checks, free online banking, no fees. This is how they have been for years. Rarely use checks anymore, but when I do, they are free.

  16. ziglet19 says:

    For my everydy checking and savings, I look for a bank with easy access (close to my house) and that doesn’t charge me fees. For my more long-term savings, I use an on-line bank where I get a better interest rate.

  17. stuarsj says:

    I’ve been stuck with a brick and mortar bank for the longest time. I recently opened a ING account for the sign on bonus and for the better interest rate.

  18. FinanceDad says:

    I agree that credit unions are the best. I do maintain my original checking account with CommerceBank though that I had in college, etc because of customer service.

  19. jsbrendog says:

    i agree with your criteria, as the main reason i havent switched to my credit union is they dont have any atms near my job or within walking distance of my apt (no car :-( ) so i stay with chase who has atms a block from my apt, in the building of my office, and basically everywhere except my bedroom.

  20. govenar says:

    I basically agree with what Jim wrote. ATM fee refunds from online banks make the ATM issue not as important, except that they don’t usually accept deposits through other banks’ ATMs. And I like having local branches for things like deposits, withdraws of a lot of cash, withdraws of rolls of quarters for laundry, redeeming savings bonds. I also want to have branches in places I travel (came in handy when I went to Vegas or visited a friend out of town), so I lean more towards nationwide banks than community ones.

  21. daenyll says:

    I was forced to close my credit union accounts local to where I grew up(and parents still live) once I aged out of the student checking and they decided to start charging me fees, and when I asked about closing the checking and keeping the savings that I would also be charged a fee if I could not maintain a direct deposit into the savings. I had maintained those accounts as a means of transferring money either from parents or when needed while visiting when home from school and most of my money is in high yield online accounts. Was rather upset that the nice local credit union I grew up with was slowly changing their practices to be more like the big banks.

  22. Izalot says:

    I’ve banked with our credit union for years and what attracts me is the convience of the location (a branch within the hospital I work at), no annual fees, the low auto loan/mortgage rates and of course the great customer service.

  23. eric says:

    Convenience/customer service/interest rate. I guess the normal things people look at. :)

  24. TheArabicStudent says:

    For a brick and mortar bank/credit union I want a place that doesn’t charge stupid fees and is close to my house or workplace. I go with Navy Federal. I don’t care so much about interest rates because the bulk of my money is in the stock market or online savings account.

  25. pmulroy says:

    #1: Don’t nickel and dime me with fees
    #2: Offer a competitive rate for savings accounts

    Btw Jim, I’m not sure I buy the whole support local credit unions because they reinvest in your community line. Big national banks don’t just keep your money sitting on their balance sheets,they loan it out (“reinvest”) it the same way your local credit union does. Granted its a much larger “community” so your deposited dollars may be loaned out to someone across the country, but at the same time, dollars that were deposited across the country may end up being loaned out to your neighbor. In the end it is a wash and you can’t really claim big national banks don’t support your community.


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