Â I donâ€™t know if youâ€™ve noticed, but in the past couple ofÂ yearâ€™s banks have changed.Â Banks have really changed.Â If you donâ€™t know what I am talking about, stop in your bank when you have time.Â Try and find a few familiar faces, people you have worked with or even just have seen over the years.Â You might notice a lot of new faces.
Â Another idea is to sit down with a banker, and ask a few questions about your account.Â If you have had it for a few years, I bet they donâ€™t offer that specific account anymore.
Â The latest recession destroyed banks.Â They took billions in losses due to bad loans, and the banks are looking to recuperate their losses.Â Guess who has to pay for their mistakes, you do lucky duck!
The government has also had a hand in why banks are changing.Â In the last few years, the government has pushed quite a few regulations on the banks.Â The biggest was the Dodd-Frank Financial Reform.Â This reform was 2319 pages and placed regulations on the financial sector.Â The regulation on debit cards was supposed to help lower bank fee’s from overdraft fees, as well as lower the amount charged to merchants.Â The banks in turn took away rewards they were giving on debit cards, and inforced minimum balances on checking accounts.Â The good old quote Sh!t rolls down hill might be suitable here.Â
For these reasons, choosing a bank that fits your needs is harder than ever.Â A lot of banks don’t just offer free checking and savings accounts anymore.Â Here are a few things you can do to help make the choice easier and cheaper.
Â The first item to consider when choosing a bank is what you will use them for.Â Do you only need a personal checking account? Or do you need a checking, savings, sweep account, business account, home equity line of credit, and a mortgage?
Â If you have complex needs, and need constant assistance then a bank that has convenient locations close to your home or offices are necessary.Â If you onlyÂ need a basic checking account with a debit card and online banking, then an online bank or credit union may work best.
Be sure to request each banks fee schedule.Â This will list all the different fees that the bank charges.Â This is very important for those who will require special services such as wire transfers or loose coin deposits.Â The fees can vary quite a bit from bank to bank, so a bad choice could end up costing you hundreds every year.Â
I have an example whereÂ a client sent about 2 wire transfers every week.Â The fee is $45, so for the year he pays around$4500 in wire transfer fees.Â It would be a wise choice for him to look around at other banks and find one that may offer wires for $30 or even less.Â That could save him $1500 or more a year.Â
Â The next step would be to consider how much you will maintain in your accounts.Â You will need to try to figure out the average monthly balance, as that is what most banks will consider when offering an account.Â Will you be keeping $100 in the account? Maybe $1000? Or maybe you like to maintain an account with around $100,000?
Â A lot of banks started charging a monthly service fee if you donâ€™t maintain a minimum balance in the account.Â The minimum balance may be $100, $500, or maybe $1000 and up.Â If you drop below that balance you will be charged a monthly service fee which could range from $3 all the way to $50.Â These minimum balance requirements are another way that banks are making of the difference from the recession.
Â You may be wondering what the heck sticky products are.Â These are the items that banks offer besides basic accounts.Â These include debit cards, credit cards, online banking and bill pay, rewards, direct deposit,Â auto save, overdraft protection and so on.Â Most of these features are free, some may have costs associated with them.Â The reason they are called ‘sticky products’ is because they help retain customers.Â The more things that you have with the bank, the harder it is to switch banks, which means you are more likely to stay.
Making the Choice
After figuring out how much you plan on maintaining in your account, how you plan on using the account, and the bells and whistles that you want in addition to your account, you are ready to choose.Â
The most basic setup for people is generallyÂ a checking, direct deposit,Â debit card, and online banking.Â If that is all you need, and don’t plan on stopping atÂ a branch often, an online bank might be best suited for you.Â Online banks offer the same basic checking, savings, debit card, direct deposit, and online banking as the brick and mortar banks.Â A lot of time online banks offer a much better interest rate as well.Â
If you own a business account or you need to deposit checks on a constant basis, then you will need a brick and mortar bank that has a lot of convenient locations.Â HereÂ are a few of them, as well as specials they are offering.Â