Student Loans: You Graduated, Now What?

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Point of Interest

There are a ton of banking options that offer a wide variety of accounts, but not all banking options will end up a good fit for you. It’s important to understand your options before making a decision on a new bank account or you could end up regretting your choice.

Learning how to choose a bank is a skill that’s often overlooked when preparing someone to navigate the world of personal finance. However, choosing the best bank account for you and your needs is essential to your future financial success.

While most banks have pretty websites and some even have flashy offers, there is no one size fits all option. In the past, some banks have found themselves in hot water by charging high fees or engaging in practices that didn’t benefit their customers. To steer clear of these issues and have great banking experience, you need to take time to make sure you’re getting with a banking partner you can trust.

Understanding the different banks and banking options

Not all banks are created equally, and understanding that is key to knowing how to choose a bank. You have different types of banks that each serve specific purposes, and within each type of bank, you have different banks or credit unions that offer specific perks and account types. You’ll have to analyze these banks based on quality and trustworthiness.

Start by understanding the different types of banks and who the banks are best for.

  • Traditional retail banks — Retail banks are the “traditional” banks that most people are used to. These banks offer checking accounts, savings accounts, credit cards, lending products and sometimes investment services to customers. If you’re looking for basic banking services and need face-to-face service, a traditional retail bank may be best for you.
  • Online banks — Online banks are similar to traditional retail banks, but they operate without physical branch locations. Because of this, you lose the ability to get face-to-face service, but you often gain better rates and perks in return. Online banks are generally best for people who want the most perks and are fine with conducting their banking through an app or a website.
  • Commercial banks — A commercial bank is set up to handle the needs of businesses large and small. Sometimes you will see commercial services through traditional retail banks, and sometimes the services will be completely independent. These banks are best for people who are business owners or are starting a business.
  • Credit unions — Credit unions are similar to retail banks but there is one major difference: credit unions are not-for-profit lending institutions. While traditional retail banks are owned by the company, credit unions are largely owned by the customers. The products and services offered through a credit union are similar to those of a traditional retail bank, making it a good fit for the same group of people.

Tip: If you’re looking for a checking or savings account with the best perks and highest interest rates, you’ll generally find those at an online bank.

Things to consider before choosing a bank

When picking out the right bank for you, your analysis needs to go further than just looking at the type of bank and what type of accounts are offered. While everything may seem similar on the surface, there are nuances that may make one option better for you.

  • ATMs — How many ATMs do you have free access to? Are ATM fees reimbursed if you use an out of network ATM? Are any of these ATMs in your area?
  • Fees — What are the monthly maintenance costs? Are they waivable? Are there any additional fees you may be charged?
  • Digital vs. branch locations — Do you have access to branch locations or is the bank completely digital? What services are you able to do online? Does the bank have a dedicated app you can use?
  • Account minimums — Are you required to deposit a certain amount of money to open an account? Do you have to carry a specific daily account balance to keep your account?
  • Rates — What sort of interest do you earn on checking accounts or savings accounts? Are they different based on how much money you have in the account?
  • Additional services — Are you planning on doing more than just opening one account? Does the bank offer the additional services you need? What is the quality of those additional services? Can you link those services easily with your new account?

Tip: Make sure you don’t get tunnel vision when deciding on a bank. Look at the factors that will affect you now and the ones that may affect you in the future.


What are some things to look for when choosing a bank?

The search for a bank starts with determining your needs. Make a list of what is important to you and then shop accordingly. Some things to look for include account minimums, fees, ATM access, interest rates and access to additional services.

How do I choose a bank for the first time?

When you’re opening your first bank account, there are things that will be important to look for. First, make sure you look at the account minimums and the fees for the account. If you don’t have a lot of money to put in, you’ll want to find an account with low or no fees and low or no account minimums. Look for a bank that offers user-friendly apps, websites and services that cater to first-time bankers. Online banks may be the best bet, as many fit these criteria.

How do I choose a bank for my checking account?

Your checking account is likely to be your most actively used account, so it’s important to find the best fit. Look for things like the accessibility to your money (checks, ATMs, etc.), user-friendly balance tracking (website and apps) and the highest interest rates (high-interest checking accounts).

The final word

Choosing a bank account is an important step in your financial growth. By taking the time to ensure you make the right selection, you are setting yourself up for success. Don’t just look for the bank with the flashiest website or the best offer. Look at the bank’s operations and options as a whole and find the right fit for you.

There is no such thing as the single best bank for everyone, as each person has different wants and needs. There is, however, such a thing as the best bank for you. Determine what you need and what is important to you and shop around accordingly.

Jason Lee

Personal Finance Contributor

Jason Lee is a seasoned copywriter with a passion for writing about banking, tech, personal growth, and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill set with the rest of the world.