(MoneyHippo.com) – Choosing where to keep money is a big decision. Luckily, technology has brought with it lots of competition benefitting you, the consumer. Banks can differ significantly in their offerings, services, and charges, so looking at several and comparing features becomes key. Similar to buying groceries, knick-knacks, and even cars, comparison shopping is crucial to obtaining the best values and features. Here are three reasons why choosing a bank this way is so important.
- Insurance against loss: The first feature depositors should always look for before making any transaction with a financial institution is Federal Deposit Insurance Corporation (FDIC) coverage. Credit unions use a similar service — the National Credit Union Association (NCUA). These insurance organizations guarantee deposits up to $250,000 per depositor per insured depository. If a bank doesn’t have federal insurance backing deposits, skip it and move on to those that do.
- Fees and interest: Once you’ve initially narrowed your list of contenders to the most secure entities, consider comparing fees, interest, and minimums as your next step. Find out what you receive in return when a financial institution charges a fee. Is it a higher interest rate? Does the cost eliminate the need for a minimum balance? When comparing side by side, think about the goals you want to achieve and pick the bank offering the best perks with the lowest possible costs.
- Deposits and withdrawals: While comparison shopping, consider how you will put your money in the bank and take it out. If you’re not transacting entirely online, look to see if the entity has brick-and-mortar locations or ATMs available near you. If so, does the financial institution charge fees to use them?
Also, remember you don’t have to choose just one bank. Think about what you’re trying to accomplish. Putting your money in multiple accounts or financial institutions could actually help you meet those particular goals.
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